Preliminary Budget Book
Preliminary Budget
an
, Draft Plan ofFinance
Seattle, Washington
2012 Budget and Business Plan
And
Draft Plan of Finance
Prepared by:
Finance and Budget Departments
Distinguished Budget Presentation Award
The Government Finance Officers Association of the United States and Canada (GFOA)
presented a Distinguished Budget Presentation Award to the Port of Seattle for its annual
budget for the fiscal year beginning January 1, 2011.
In order to receive this award, a governmental unit must publish a budget document that
meets pro-gram criteria as a policy document, as an operations guide, as a financial plan
and as a communications device.
This award is valid for a period of one year only. We believe our current budget continues
to conform to programs requirements, and we are submitting it to GFOA to determine its
eligibility for another award.
Port of Seattle 2012 Preliminary Budget
TABLE OF CONTENTS
Organization
Budget Document Organization 1
I. Executive Summary
2012 Budget Message I-1
II. Port View
A. The Port of Seattle II-1
B. History of the Port of Seattle II-1
C. Facilities and Services II-1
D. Strategic Planning II-3
E. Commissioners and Officers II-4
F. Organization Chart II-5
III. Budget Overview
A. Business Plan Overview III-1
B. Operating Budget Overview III-2
C. Budget Overview-Staffing III-7
D. Capital Budget Overview III-8
E. Tax Levy III-9
IV. Aviation Division
A. 2012 Budget Summary IV-1
B. Business Plan Forecast IV-3
C. Division Mission Statement IV-4
D. Business Plan and Strategies IV-4
E. Operating Budget Summary IV-27
F. Staffing IV-31
G. Capital Budget IV-32
H. Aviation Division Operating Statistics IV-33
V. Seaport Division
A. 2012 Budget Summary V-1
B. Business Plan Forecast V-3
C. Division Mission Statement V-3
D. 2012 Business Plan V-4
E. Seaport Operating Budget Summary V-16
F. Staffing V-19
G. Seaport Capital Budget V-20
H. Seaport Division Operating Statistics V-21
VI. Real Estate Division
A. 2012 Budget Summary VI-1
B. Business Plan Forecast VI-3
C. Division Mission Statement VI-3
D. Real Estate Operating Budget Summary VI-25
E. Staffing VI-28
F. Real Estate Development Capital Budget VI-29
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Port of Seattle 2012 Preliminary Budget
VII. Capital Development Division
A. 2012 Budget Summary VII-1
B. Mission Statement VII-1
C. Key Responsibilities and Services VII-2
D. Capital Development Division Budget Summary VII-7
E. Staffing VII-9
F. Capital Budget VII-9
G. Capital Development Division Summary VII-9
VIII. Corporate
A. 2012 Budget Summary VIII-1
B. Mission Statement VIII -1
C. Key Responsibilities and Services VIII -1
D. Corporate Budget Summary VIII-13
E. Staffing VIII-16
F. Capital Budget VIII -17
G. Corporate Capital Budget Summary VIII -17
IX. Tax Levy
A. Tax at a Glance IX-1
B. Tax Levy Sources IX-1
C. Tax Levy Uses IX-3
D. General Obligation Capacity IX-7
E. Taxpayer Effect IX-8
F. County Property Tax Comparison IX-8
X. Capital Budget X-1
XI. Draft Plan of Finance XI-1
XII. Statutory Budget
A. Introduction XII-1
B. Statutory Budget Highlights XII-1
C. Resolution XII-2
D. Tax Levy Calculation Sheet XII-4
E. Forecasted Cash Flow Summary XII-5
XIII. Appendixes
A. Budget Policy, Process and Calendar XIII-1
1. Operating Budget XIII-1
2. Capital Budget XIII-7
B. Financial Management Policies XIII-10
1. Key Financial Tools XIII-10
2. Financial Policies and Description of Major Funds XIII-11
3. Revenue and Expense Assumptions XIII-16
C. Business Assessment XIII-17
D. Bond Amortization Schedules XIII-23
E. Aviation Landing Fee Revenues XIII-27
F. Other Detailed Expenditures XIII-28
G. Glossary of Terms Used XIII-29
H. Acronyms and Abbreviations XIII-34
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Port of Seattle 2012 Preliminary Budget
LIST OF TABLES
Table I-1 2012 Budget Summary I-5
Table I-2 Cash Flow I-6
Table III-1 Port of Seattle Business Plan Forecast III-1
Table III-2 Revenues, Expenses, and Net Assets III-4
Table III-3 Revenues and Expenses by Account Category III-5
Table III-4 Port Staffing by Division III-7
Table III-5 Capital Budget III-8
Table IV-1 Aviation Division 2012 Cash Flow Summary IV-1
Table IV-2 Aviation Business Plan Forecast IV-3
Table IV-3 Aviation Key Measures IV-3
Table IV-4 Aviation Revenue by Account IV-27
Table IV-5 Aviation Operating & Maintenance Expenses by Account IV-28
Table IV-6 Aviation Revenue and Expense by Business Group/Department IV-29
Table IV-7 Aviation Division Staffing IV-31
Table IV-8 Aviation Division Capital Budget Summary IV-32
Table IV-9 Aviation Division Operating Statistics IV-33
Table V-1 Seaport Division 2012 Cash Flow Summary V-1
Table V-2 Seaport Business Plan Forecast V-3
Table V-3 Lease and Asset Management Business Plan Forecast V-10
Table V-4 Cruise and Maritime Operations Business Plan Forecast V-15
Table V-5 Seaport Revenue by Account V-16
Table V-6 Seaport Operating & Maintenance Expenses by Account V-17
Table V-7 Seaport Revenue and Expense by Business Group/Department V-18
Table V-8 Seaport Division Staffing V-19
Table V-9 Seaport Division Capital Budget Summary V-20
Table V-10 Seaport Division Operating Statistics VI-21
Table VI-1 Real Estate Division 2012 Cash Flow Summary VI-1
Table VI-2 Real Estate Division Business Plan Forecast VI-3
Table VI-3 Real Estate Harbor Services Business Plan Forecast VI-10
Table VI-4 Portfolio Management Business Plan Forecast VI-16
Table VI-5 Eastside Rail Business Plan Forecast VI-16
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Port of Seattle 2012 Preliminary Budget
Table VI-6 Development and Planning Business Plan Forecast VI-19
Table VI-7 Real Estate Revenue by Account VI-25
Table VI-8 Real Estate Operating & Maintenance Expenses By Account VI-26
Table VI-9 Real Estate Revenue and Expenses By Department VI-27
Table VI-10 Real Estate Division Staffing VI-28
Table VI-11 Real Estate Division Capital Budget Summary VI-29
Table VII-1 Capital Development Division 2012 Budget Summary VII-1
Table VII-2 Capital Development Division Expense by Department VII-7
Table VII-3 Capital Development Division Revenues and Expenses by Account VII-8
Table VII-4 Capital Development Division Staffing VII-9
Table VII-5 Capital Development Division Summary VII-9
Table VIII-1 Corporate 2012 Budget Summary VIII-1
Table VIII-2 Administrative Expense by Department VIII-13
Table VIII-3 Corporate Revenues and Expenses by Account VIII -15
Table VIII-4 Corporate Division Staffing VIII -16
Table VIII-5 Corporate Capital Budget VIII -17
Table VIII-6 Corporate Summary VIII 17
Table IX-1 Sources and Uses of Tax Levy IX-4
Table IX-2 Direct Levy or G.O. Bond Funded Committed Projects IX-5
Table IX-3 Existing G.O. Bond Debt Service By Projects and Group IX-6
Table X-1 Capital Budget X-1
Table X-2 Public Expense and Special Item Projects X-7
Table X-3 Non-Recurring Capital Budget Impact on the operating Budget X-8
Table XII-1 Tax Levy Calculation Sheet XII-4
Table XII-2 Forecasted Cash Flow Summary XII-5
Table C-1 Summary Forecast XIII-18
Table C-2 State Employment by Industry XIII-19
Table C-3 Top 10 Public Companies in Washington XIII-20
Table C-4 North American West Coast Ports' Total Container Volumes XIII-20
Table D-1 Bond Amortization Schedules for 2011 XIII-23
Table D-2 Bond Amortization Schedules for 2012 XIII-25
Table E-1 Landing Fee Revenue Calculation XIII-27
Table F-1 Promotional Hosting by Division XIII-28
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LIST OF FIGURES
Figure I-1 Sources of Funds I-7
Figure I-2 Uses of Funds I-7
Figure II-1 Facility Map II-2
Figure II-2 Organization Chart II-5
Figure III-1 Operating Revenues by Source: 2012 III-6
Figure III-2 Operating Expenses by Usage: 2012 III-6
Figure III-3 Port Staffing by Division III-7
Figure III-4 2012 Committed Capital Budget III-8
Figure III-5 Tax Levy vs. Millage Rate 2003-2012 III-9
Figure IV-1 Aviation Division Sources of Cash IV-2
Figure IV-2 Aviation Division Uses of Cash IV-2
Figure IV-3 Aviation Division Revenue by Account IV-27
Figure IV-4 Aviation Division Expense by Account IV-28
Figure IV-5 Aviation Division Committed Capital Budget IV-32
Figure V-1 Seaport Division Sources of Cash V-2
Figure V-2 Seaport Division Uses of Cash V-2
Figure V-3 Seaport Division Revenue by Account V-16
Figure V-4 Seaport Division Expense by Account V-17
Figure V-5 Seaport Division Committed Capital Budget V-20
Figure VI-1 Real Estate Division Sources of Cash VI-2
Figure VI-2 Real Estate Division Uses of Cash VI-2
Figure VI-3 Real Estate Division Revenue by Account VI-25
Figure VI-4 Real Estate Division Expense by Account VI-26
Figure VI-5 Real Estate Division Committed Capital Budget VI-29
Figure VII-1 Capital Development Division Expense by Department VII-7
Figure VII-2 Capital Development Division Expense by Account VII-8
Figure VIII-1 Administrative Expense by Department VIII-14
Figure VIII-2 Administrative Expense by Account VIII-15
Figure IX-1 Actual Tax Levy vs. Maximum Allowable Levy 1991-2012 IX-2
Figure IX-2 Tax Levy vs. Millage Rate 2003-2012 IX-2
Figure IX-3 Assessed Valuation vs. Millage Rate 2003-2012 IX-8
Figure IX-4 2011 Percentage of Tax Levies By Taxing District IX-8
Figure XII-1 Sources of Cash XII-6
Figure XII-2 Uses of Cash XII-6
Figure A-1 Operating Budget Process Flow Chart XIII-5
Figure A-2 Capital Budget Process Flow Chart XIII-8
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Port of Seattle 2012 Preliminary Budget
BUDGET DOCUMENT ORGANIZATION
This document contains the operating, capital and statutory budgets, business plan and draft plan of finance
for the Port of Seattle and is organized as follows:
Section I has the Budget Message from the Chief Executive Officer depicting the 2012 plans, budget
highlights, a budget summary, which is summarized in Table I-1 and a cash flow summary in Table I-2
and charts depicting sources and uses of funds. Table I-1 depicts the operating revenues, expenses,
capital budget and full-time equivalent positions by division. This table differs from the other tables in
section III in that it shows the portion of the corporate/administrative expense that is not allocated to the
divisions. Otherwise, the division expenses would not add up to the total port expenses.
Section II, the Port View, contains the history of the port, its facilities and services, strategies, its
commissioners and officers and organization chart.
Section III, the Overview of the 2011 business plan and budget contains an executive summary
discussion of the Port's Operating and Non-operating Budget, Capital Budget, and Tax Levy.
o Table III-1 provides a summary of the Port business plan forecast for the period 2011-2016.
o Table III-2 summarizes the Port's revenues, expenses, and net assets for the years 2008-2012.
o Table III-3 summarizes the Port's operating revenues and expenses by major account, 2010-2012.
o Table III-4 summarizes the Port's staffing by division, 2010-2012.
o Table III-5 summarizes the Port's Capital Budget, 2012-2016.
The Operating Division summaries for the Aviation, Seaport, and Real Estate Divisions (Sections IV
through VI) present the summary business plans for each business group, operating budget, staffing, and
capital budget for each division. The operating budget is presented by business groups/departments as
well as by major revenue and expense accounts. One thing to note is that the business
groups/departments table in each division (Table IV-6, V-8, VI-9) differs from the other tables in that it
shows the division's controllable costs only and does not reflect the direct charges and corporate
allocations expenses from the corporate and capital development divisions.
Sections VII and VIII present a summary of the Capital Development Division and Corporate,
descriptions of the departments, operating budgets, staffing, and capital budgets.
A detailed presentation and discussion of the Tax Levy is provided in Section IX.
Details of the Capital Budget are provided in Section X. A summary page presents the total capital
budget by business group and by division. Following the summary is a listing of the projects by business
group and division.
The Draft Plan of Finance is provided in Section XI.
The Statutory Budget, which is submitted to King County Council and King County Assessor, is
provided in Section XII.
The Appendices include detailed information regarding the budget and financial policies, business
assessment, bond amortization schedules, landing fee calculation, other detailed expenditures, glossary
of terms used and acronyms, are provided in Section XIII.
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Port of Seattle 2012 Preliminary Budget
PORT OF SEATTLE
MEMORANDUM
DATE: October 17, 2011
TO: Port Commission
FROM: Tay Yoshitani, Chief Executive Officer
SUBJECT: 2012 Budget Message
INTRODUCTION
Managing through the economic uncertainty
As we prepare the Port of Seattle budget for 2012, I am mindful of the hard work and sacrifices you have
made in the past few years so the port's businesses could continue to operate in a strong and solid financial
position. The proactive measures we took were difficult, but they have sustained us through these
challenging times and enabled us to achieve positive results.
We continue to face economic uncertainty. The continued slowdown in the U.S. economy, the high
unemployment rate at both the national and state levels, the federal deficit reduction negotiation, the ongoing
cuts to address state and local government budget gaps, and the European sovereign debt crisis all
cast doubt on the strength of recovery.
While we anticipate only modest growth in port operating revenues during 2012, we expect noticeable cost
increases due to several factors including the new rental car facility and related activities, terminal
realignment, deferred maintenance reduction program, and payroll costs. We must continue our prudent
and conservative approach to cost management to ensure the port's long-term economic viability.
Port businesses remain steady
Our core businesses are performing well compared to many of our peers. Sea-Tac Airport has seen strong
passenger growth in the first half of 2011. Through August, domestic enplaned passengers are up 4.2
percent, while international enplanements are up 7.6 percent, for a total increase of 4.5 percent. We don't
expect this rate of growth to continue, but anticipate growth for the year to total 3.5 percent, exceeding our
previous record for enplaned passengers reached in 2008. For 2012, we are forecasting a 1.5 percent
growth rate. Our strategic focus will be to increase facility capacity to accommodate growing international
service and cargo, improve customer service, invest in the renewal and replacement of aging assets, and
grow non-aeronautical revenues.
The Seaport expects an increase in cruise passengers and a new lease at Terminal 106 to increase operating
revenues 2.5 percent relative to the 2011 budget. We welcome the addition of a Disney Cruise Line
homeport ship, expected to increase passenger volumes by about 10 percent. Critical 2012 Seaport goals
include increasing cargo freight and passengers moving through the freight and passenger terminals,
developing a stewardship plan for key division assets, and continued implementation of The Green
Gateway strategy, which gives us a competitive edge among West Coast ports.
Real Estate Division operating revenue is expected to grow by about 2 percent compared to 2011 budget
levels. Third party and lease revenue is expected to increase slightly as the hospitality and real estate
markets continue to recover. However, the risk remains for higher vacancies in commercial properties and
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Port of Seattle 2012 Preliminary Budget
recreational marinas. Key 2012 focus areas for this division will be cost management, property renewal
and replacement, and management of the Eastside Rail Corridor sections retained by the port.
2012 Budget Approach
Because of the economic uncertainty and some known cost increases, we must take a conservative
approach to budgeting for 2012. Finance & Budget department has provided each division and Corporate
with a preliminary budget target number.
Looking Ahead
As the Port begins its second century, we will have new goals and objectives to guide us for the next 25
years. The Century Agenda strategic planning process has engaged employees and expert panels to create a
visionary look forward to the emerging challenges and opportunities of the 21st century. In addition,
exciting new investments will enable us to serve our customers and the general public better and improve
the environment in our community and region. The new rental car facility will open in spring of 2012; the
terminal realignment at the airport is well underway; and we will continue to implement the award-winning
Northwest Ports Clean Air Strategy.
BUSINESS PLAN/ OPERATING BUDGET
The fiscal management of the budget is the cornerstone of our success as a Port. The 2012 operating
revenues are budgeted at $518.1 million, a $25.3 million or 5.1% increase from 2011 budget. Operating
expenses are budgeted at $309.7 million, a $23.9 million or 8.4% increase compared to 2011 budget. Net
Operating Income before Depreciation is $208.4 million, a $1.4 million or 0.7% increase.
Aviation
The Aviation Division manages Aeronautical and Non-aeronautical sides of its business. On the
Aeronautical side, the Port's goal is to manage cost in terms of cost per enplanement (CPE).The budgeted
2012 CPE is $13.25, compared to $12.76 in the 2011 budget. On the non-aeronautical side, the primary
goal is to increase cash flow as measured by net operating income (NOI).
Operating revenues are budgeted at $387.0 million. Revenues from airlines are $235.6 million, non-airline
revenues are $150.1 million, and other revenues are $1.2 million. Total operating expenses are budgeted at
$225.0 million. Net operating income before depreciation is $162.0 million.
Seaport
The Seaport includes two major business groups: Lease & Asset Management and Cruise & Maritime
Operations. There are also service groups within the Seaport Division. Commercial Strategy, which
focuses on marketing container assets, Environmental Services & Planning, and Finance. These businesses
and service groups oversee the development and management of cargo and cruise terminals, moorage
facilities, and industrial properties connected to these businesses.
Seaport operating revenues are budgeted at $98.6 million. Total operating expenses, including corporate
costs, are $46.5 million. Net operating income before depreciation is $52.0 million.
Real Estate
The Real Estate Division includes five functional workgroups: Real Estate Development & Planning,
Harbor Services, Maintenance, Property Management & Leasing and Pier 69 Facilities Management.
These business and service groups oversee the development and management of various Port assets and
vessel moorage facilities. Financial services, project management, facility planning, and environmental
services are provided by the Seaport Division.
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Port of Seattle 2012 Preliminary Budget
Real Estate operating revenues are budgeted at $32.4 million. Total operating expenses including corporate
costs are $37.2 million. Net operating income before depreciation is minus $4.8 million.
Capital Development
The Capital Development Division (CDD) includes six functional workgroups: Engineering, Port
Construction Services, Aviation Project Management Group, Seaport Project Management Group, Central
Procurement Office, and CDD Administration. The CDD delivers projects and provides technical and
contracting services in support of the business plans and infrastructure needs of the Port of Seattle.
Capital Development operating expenses are budgeted at $15.5 million.
Corporate
The three operating divisions of the Port are supported by a number of functional departments as well as
service groups, including the Port's Police Department. These functional and service groups allocate their
expenses according to the level of service they provide to the divisions. Corporate operating expenses are
budgeted at $76.5 million.
CAPITAL BUDGET
The total capital budget for 2012 is $406.4 million and the five year capital improvement program is $1.5
billion, which reflects the Port's continuing commitment to promoting regional economic activity through
the investment in the development, expansion, and renewal of Port facilities that supports the Port's
Business Plan and Green Initiative.
TAX LEVY
The Port's 2012 Budget assumes a levy amount of $73.5 million, no change from 2011; however, due to
the decline in assessed value, the tax levy rate increased by 4.23% to $0.2329 per $1000 of assessed value
from $0.2160. The Tax Levy, Section IX of this document provides details on the uses of the Port's levy.
SUMMARY
We still face considerable budget challenges in 2012, but with the right tools, resources and our highly
capable employees, we are well positioned to continue the port's strong record of success. The annual
budget is an essential management tool to sustain our businesses. I appreciate your commitment to and
involvement in the 2012 budget.
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Port of Seattle 2012 Preliminary Budget
2012 Budget Highlights
The Port takes a conservative approach for the 2012 Budget and strives to maintain a strong bottom line.
We also continue to invest in business operations that retain and attract customers, create jobs, assure best
value and return on investment, and help position the Port for future growth.
Operating revenues are budgeted at $518.1 million, a $25.3 million or 5.1% increase from 2011
budget. Aeronautical revenues, which are based on cost recovery, are $ 235.6 million, an increase
of $18.4 million or 8.5%. Other operating revenues are $282.5 million, an increase of $6.8 million
or 2.5% compared to 2011 budget.
Total Revenues, which include the $518.1 million operating revenues and $205.1 million nonoperating
revenues, are $723.2 million, a $12.2 million or 1.7% increase from 2011 budget.
Operating expenses are $309.7 million for 2012 budget, a $23.9 million or 8.4% increase from
2011 budget. The new Rental Car Facility and the Terminal Realignment account for about half of
the increase ($11.8 million out of the $23.9 million).
Other key drivers for cost increase in 2012 budget are baseline payroll and contractual increases,
deferred maintenance, initiatives tied to strategic goals and Century Agenda, Audit
Committee/Internal Audit initiatives, and other initiatives related to Enterprise Risk Management,
Medical Plan review/design and business process improvement.
To mitigate rising medical costs, the Port will continue the self-funding medical plan in 2012 and
ask employees for more medical cost sharing. These and other measures, including the Spirit and
Wellness Program, help keep the medical cost at a moderate 2.2% increase for 2012.
The average pay increase for non-represented employees is budgeted at 3.0% for 2012, which is in
line with the projected 3.15% average increase in the regional salary planning surveys.
Despite the increased costs, the Port's net operating income is forecasted to remain strong at $208.4
million, $1.4 million or 0.7% higher than 2011 budget.
Operating expenses are $309.7 million and non-operating expenses including depreciation are
$330.6 million for 2012 budget. Total expenses are $640.3 million, a $4.2 million or 0.6%
reduction from 2011 budget.
Net operating income after depreciation is $49.9 million and net non-operating income is $33.0
million, resulting in an $82.9 million increase in Net Assets for 2012 budget. This represents a
$16.3 million or 24.5% increase from 2011 budget.
The Port's capital budget for 2012 is $406.4 million, which includes investments in projects that
create near-term jobs, as well as environmental initiatives and congestion relief projects that ease
the movement of freight throughout the region.
Major capital projects for 2012 include: Rental Car Facility, Terminal Escalator Modernization,
Central Plant Pre-conditioned Air, Aircraft RON Parking, Terminal Realignment, Electrical
Ground Service Equipment (EGSE) Rolling Stock, 8th Floor Garage Weather Proofing, Street
Vacation Related Projects, T25 South Redevelopment Phase 2, Apron Piling, and Cathodic
Protection.
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Port of Seattle 2012 Preliminary Budget
TABLE I-1: 2012 BUDGET SUMMARY
($ in 000's)
OPERATING BUDGET Notes Aviation Seaport Real Estate Capital Corporate Total
Airline Revenue $ 235,619 $ 235,619
Non-Airline Operating Revenues 150,831 98,579 32,401 151 281,962
Security Reimbursement 0 0
Fuel Hydrant Facility 514 514
Total Operating Revenues 386,964 98,579 32,401 0 151 518,095
Operating and Maintenance Expense 3 157,754 29,078 30,530 0 217,361
Corporate Administrative Expense 47,145 17,458 5,344 0 1,006 70,953
Law Enforcement Costs 1 16,964 0 1,350 18,314
Environmental Expense 3,096 0 0 0 3,096
Total Operating Expense 224,959 46,536 37,224 0 1,006 309,725
Net Operating Income before Depreciation 162,005 52,043 (4,823) 0 (855) 208,370
Depreciation 117,072 31,713 9,694 0 158,479
Net Operating Income after Depreciation 44,934 20,330 (14,517) 0 (855) 49,891
Revenue Bond Interest Expense (121,075) (12,084) (2,647) 0 0 (135,806)
Interest Income 4,380 1,306 62 0 0 5,748
Non-Op Environmental Expense 0 (5,090) (200) 0 0 (5,290)
Other Non-Op Income (Expense) (901) (2,278) (397) 0 0 (3,576)
Ad Valorem Tax Levy Revenue 2 546 49,320 23,634 0 0 73,500
Public Expense (650) (5,004) 0 0 0 (5,654)
G.O. Bond Interest & Amortization 0 (12,887) (2,039) 0 0 (14,926)
Passenger Facility Charges 63,448 0 0 0 0 63,448
Customer Facility Charges 21,333 0 0 0 0 21,333
Fuel Hydrant revenue 4 7,839 0 0 0 0 7,839
PFC Bond Interest & Amortization (6,826) 0 0 0 0 (6,826)
Non Capital Grants and Donations 1,479 0 300 0 0 1,779
Net Non-operating (30,427) 13,283 18,712 0 0 1,568
Capital Contributions 28,982 2,466 0 0 0 31,448
Revenue Over Expense $ 43,487 $ 36,079 $ 4,195 $ - $ (855) $ 82,907
CAPITAL BUDGET Aviation Seaport Real Estate Capital Corporate Total
Committed $ 276,926 $ 25,706 $ 10,924 $ 398 $ 11,524 $ 325,478
Business Plan Prospective 69,908 4,868 3,600 0 2,525 80,901
Total $ 346,834 $ 30,574 $ 14,524 $ 398 $ 14,049 $ 406,379
EMPLOYEES Aviation Seaport Real Estate Capital Corporate Total
Total FTE's 859.0 59.9 165.8 255.8 452.2 1,792.7
ONEPGSUM.XLS
Notes:
1) 2012 Budget law enforcement costs includes Police costs.
2) See Tax Levy Section IX for detail of tax levy use.
3) Capital Development Division allocates expenses to the Aviation, Seaport and Real Estate divisions.
4) Fuel Hydrant non-cash recorded as non-operating revenues based on Accounting change.
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Port of Seattle 2012 Preliminary Budget
TABLE I-2: CASH FLOW SUMMARY
Percent
($ in 000s) 2012 of Total
Beginning balance of cash & investments $ 717,812
SOURCES OF CASH
Operating Revenues 518,095 71.6%
Interest Receipts 5,748 0.8%
Proceeds from Bond Issues 0 0.0%
Grants and Capital Contributions 33,227 4.6%
Tax Levy 73,500 10.2%
Passenger Facility Charges 63,448 8.8%
Rental Car Customer Facility Charges 21,333 2.9%
Fuel Hydrant Receipts 7,839 1.1%
Other Receipts 754 0.1%
Total 723,943 100%
Anticipated available funds 1,441,756
USES OF CASH
Expenses from Operations:
Operating & Maintenance Expense 217,361 21.4%
Corporate Administrative Expense 70,953 7.0%
Law Enforcement Costs 18,314 1.8%
Environmental Expenditures 3,096 0.3%
Total Operating Expenses 309,725 30.5%
Debt Service:
Interest Payments 159,240 15.7%
Bond Redemptions 124,200 12.2%
Total Debt Service 283,440 27.9%
Other Expenses 9,619 0.9%
Public Expense 5,654 0.6%
Capital Expenditures 406,379 40.0%
Total 1,014,817 100%
Ending balance of cash & investments $ 426,938
Increase (decrease) of cash during year $ (290,873)
cashflow.xls
Note: We built-up a significant cash balance in the past few years due to economic
uncertainty, and we are planning to draw down the cash balance in 2012.
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Port of Seattle 2012 Preliminary Budget
FIGURE I-1: SOURCES OF FUNDS
($ in 000's)
Rental Car Customer
Facility Charges
2.9% Fuel Hydrant Receipts
Passenger 1.1% Other Receipts
Facility Charges 0.8%
8.8%
Tax Levy
Grants and Capital 10.2%
Contributions
4.6%
Operating Revenues
71.6%
Interest Receipts
0.1%
Total Sources: $723,943
FIGURE I-2: USES OF FUNDS
($ in 000's)
Operating &
Maintenance Expense Corporate
21.4% Administrative Expense
7.0%
Capital Expenditures
40.0%
Law Enforcement
Costs
1.8%
Interest Payments
Bond Redemptions 15.7% Environmental
12.1% Expenditures
0.3%
Public Expense
0.6%
Other Expenses Total Uses: $1,014,817
0.9%
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Port of Seattle 2012 Preliminary Budget
A. THE PORT OF SEATTLE
The Port of Seattle, (the "Port"), is a public enterprise with unique authority operating in an international,
market-driven environment. The Port provides services to its customers in order to return benefits to the
citizens of King County, giving careful consideration to the economic, social, and environmental
implications of its decisions.
The Port is comprised of three operating divisions, namely Aviation, Seaport, and Real Estate, in addition to
the Capital Development Division and Corporate. The Aviation Division manages the Seattle -Tacoma
International Airport, ("Sea-Tac"). T he Seaport Division manages (primarily through leases) cargo and
passenger marine terminals as well as industrial property connected with maritime businesses. The Real
Estate Division manages moorage facilities, leases commercial and industrial buildings/properties, and plans
and facilitates the development of selected real estate assets.
The Capital Development Division was established during 2008 and became fully operational during 2009.
It houses existing engineering, project management and construction functions and the Port's new Central
Procurement Office which consolidates contracting and procurement functions.
Corporate Division provides high quality and cost-effective professional and technical services to the
operating divisions and support the overall goals of the Port.
B. HISTORY OF THE PORT OF SEATTLE
The Port was established in 1911 in an effort by citizens to ensure public ownership of the Seattle harbor.
The Port of Seattle was the first autonomous municipal corporation in the United States specifically tasked to
develop harbor and Port facilities to encourage commerce. The Port opened Fishermen's Terminal in 1912,
its first warehouse in 1915 and began working on the creation of Harbor Island. Since then, the Port has
developed numerous properties as well as constructed the Seattle-Tacoma International Airport in 1949.
The Port's task hasn't changed over the years but its scope of services has expanded considerably. The Port
continues to upgrade and modernize its facilities to meet current market demands. The Port has added
container terminals, a grain terminal, cruise terminals, marinas, public parks and viewpoints and contributed
significantly in the development of public amenities along Seattle's waterfront.
C. PORT OF SEATTLE FACILITIES AND SERVICES
Sea-Tac is located on 2,800 acres sixteen miles south of downtown Seattle. The Port has made significant
improvements to the airport including a new terminal expansion, and infrastructure upgrades. The airport
includes 3 runways that are 11,900 feet, 9,425 feet, and 8,500 feet in length and a subway system linking the
concourses. Sea-Tac is the 17th largest U.S. airport as measured by total passengers and compared to other
large airports and has relatively high originations and destinations traffic.
Seaport facilities encompass approximately 1,200 acres of moorage and cargo-related facilities. Over 500
acres are dedicated to container operations at 4 terminals with over12,300 feet of container berth space
and 24 cargo cranes-including 7 Super Post-Panamax cranes. The Seaport also owns a fully automated grain
terminal and general purpose maritime facilities. It is home to the North Pacific factory trawler fishing
fleet. The Seaport also operates 2 cruise vessel terminals with a total of 3 berths. In addition, the Seaport
leases industrial property connected with these cruise, cargo, and factory trawler fishing businesses.
The Real Estate Division manages the Port's holdings in commercial real estate, recreational marinas,
industrial fishing terminals and developable property. This division was formed in 2008 and allows the
Seaport and Aviation Divisions to concentrate on their core businesses.
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Port of Seattle 2012 Preliminary Budget
FIGURE II-1: FACILITY MAP
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Port of Seattle 2012 Preliminary Budget
D. STRATEGIC PLANNING
Strategic Overview: Creating a Sustainable Port
The Port's five-year strategic plan is driven by several key strategic challenges and opportunities facing the
institution and the region today, with the goal of long-term sustainability. These challenges and opportunities
include:
Increasing competition from other ports, airports, and regions.
Decreasing availability of public funds.
Decreasing profit margins for most port and airport customers.
Complying with new security restrictions and costs to the global transportation system.
Increasing surface traffic congestion.
An emerging new economy based on information-intensive products and services.
A growing community interest in sustainability, to achieve a long-term balance of economic, social
and environmental objectives and values.
Influencing the demographics changes in present and future workforce.
The strategic focus of the organization for 2012 will center on these initiatives:
Bring environmental leadership to front and center of entire organization.
Achieve 2012 operating profit goals.
Keep capital projects on schedule and budget.
Strengthen the oversight of capital development and management.
Promote programs for a high performance organization.
Be proactive in public relations.
Mission
Creating economic vitality HERE
Vision and Values
At the Port of Seattle, we:
Invest in QUALITY services and facilities for our customers and community.
Act with INTEGRITY and OPENNESS.
Take RESPONSIBILITY and make the hard choices.
Treat each other with TRUST AND RESPECT.
Embrace DIVERSITY in our workforce and partnerships.
Promote CONTINUOUS IMPROVEMENT in our organization and in ourselves.
Strategies
Ensure Airport and Seaport vitality.
Develop new business and economic opportunities for the region and the Port.
Enhance public understanding and support of the Port's role in the region.
Be a catalyst for regional transportation solutions.
Be a leader in transportation security.
Exhibit environmental stewardship through our actions.
Be a high performance organization.
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Port of Seattle 2012 Preliminary Budget
E. COMMISSIONERS AND OFFICERS
The Port Commission is the legally constituted governing body of the Port of Seattle. As a governing body
of a special purpose municipal corporation, it is charged with the responsibility of fulfilling legislatively
mandated purposes and objectives.
The Port Commission is made up of five elected individuals. They are:
Bill Bryant, Chair and President
Rob Holland, Vice President
John Creighton, Secretary
Tom Albro, Assistant Secretary
Gael Tarleton, Commissioner
The senior officers of the Port are:
Tay Yoshitani, Chief Executive Officer
Kurt Beckett, Chief of Staff
Mark Reis, Managing Director, Aviation
Linda Styrk, Managing Director, Seaport
Dan Thomas, Chief Financial and Administrative Officer
Craig Watson, General Counsel
Ralph Graves, Managing Director, Capital Development
Joe McWilliams, Managing Director, Real Estate
Patricia Akiyama, Director, Public Affairs
Colleen Wilson, Chief, Police Department
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Port of Seattle 2012 Preliminary Budget
F. ORGANIZATION CHART
FIGURE II-2: ORGANIZATION CHAR T
King County Voters
Commission
Executive Office Internal Audit
Aviation Seaport Real Estate Capital Corporate *
859.0 FTEs 59.9 FTEs 165.8 FTEs Development 452.2 FTEs
255.8 FTEs
Accounting &
Business Airport Lease & Asset Development & Aviation Project
Financial Public Affairs
Development Operations Management Planning Management
Reporting
Cruise &
Capital
Maritime Facilities
Airport Development Finance & Budget Health & Safety
Aeronautical Operations Management
Properties Administration
Business Commercial Central Information &
Human Resources
Development & Landside Strategy Harbor Services Procurement Communications
& Development
Management Office Technology
Environmental
Community
Concessions Planning Fishing &
Development Engineering Legal Labor Relations
Commercial
Vessels
Finance &
Aviation Finance & Budget
Recreational Port Construction Police Office of Social
Facilities Budget
Boating Services Department Responsibility
Seaport
Environmental Administration Marine Seaport Project
Building Management Risk Management
Maintenance Management
Department and Planning
Airport Office
Security Portfolio
Building
Management Management
Facilities & Fire
Real Estate
Infrastructure Department
Administration
Utilities
Aviation
Maintenance
*For reporting purposes, Commission Office, Executive Office, and Internal Audit all roll up to Corporate.
Filename: _2 Port View
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Port of Seattle 2012 Preliminary Budget
A. BUSINESS PLAN OVERVIEW
Table III-1 below is a summary of the combined business plan forecasts of the Port's operating divisions,
which can be found in Sections IV, V and VI.
TABLE III-1: PORT OF SEATTLE BUSINESS PLAN FORECAST
($ in 000's) Compound
Budget Budget Forecast Growth
OPERATING BUDGET Notes 2011 2012 2013 2014 2015 2016 2011-2016
Airline Revenue $ 217,200 $ 235,619 $ 263,093 $ 276,525 $ 289,057 $ 296,224 6.4%
Non-airline Revenue 1 275,084 281,962 294,429 310,247 318,191 327,358 3.5%
Fuel Hydrant Facility 8,353 514 514 514 514 514 -42.7%
Fuel Hydrant Facility reclass to non-ops revenues 2 (7,839) 0 0 0 0 0 -100.0%
Total Operating Revenues 492,797 518,095 558,036 587,286 607,762 624,096 4.8%
Operating & Maintenance Expense 197,781 217,361 232,044 220,501 226,066 232,310 3.3%
Corporate & Capital Development Division Costs 1 68,553 70,953 72,522 75,198 77,980 80,871 3.4%
Law Enforcement Costs 17,739 18,314 18,870 19,443 20,034 20,642 3.1%
Environmental Expense 1,771 3,096 3,189 3,285 3,384 3,485 14.5%
Total Operating & Maintenance Expenses 1 285,844 309,725 326,626 318,428 327,463 337,308 3.4%
Net Operating Income Before Depreciation 206,954 208,370 231,410 268,858 280,300 286,788 6.7%
Total Depreciation Expense 160,491 158,479
Net Operating Income after Depreciation $ 46,464 $ 49,891
Total
2012-2016
Committed Capital Budget $ 288,327 $ 325,478 $ 136,958 $ 43,078 $ 10,523 $ 15,930 $ 531,967
Business Plan Prospective 90,206 80,901 228,041 215,577 146,063 306,070 976,652
TOTAL CAPITAL BUDGET 3 $ 378,533 $ 406,379 $ 364,999 $ 258,655 $ 156,586 $ 322,000 $ 1,508,619
POSBPFOR.XLS
Notes:
1) Includes revenue from Corporate & Capital Development departments and corresponding offset to allocated charges from Corporate departments.
2) Fuel Hydrant non-cash recorded as non-operating revenues based on Accounting change.
3) See Section X for details of Capital Budget.
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Port of Seattle 2012 Preliminary Budget
B. OPERATING BUDGET OVERVIEW
OVERVIEW
The 2012 budget proposes total operating revenues of $518.1 million and total operating expenses of $309.7
million. Net Operating Income before Depreciation calculates to $208.4 million. Net Operating Income
after Depreciation is budgeted at $49.9 million.
AVIATION DIVISION
The Aviation Division operates the Seattle-Tacoma International Airport, which was the seventeenth largest
US airport as measured by total passengers in 2010. Enplaned passenger traffic at Sea-Tac grew by 1.0% in
2010. For the year through August, enplaned passengers are 4.5% above 2010. The forec ast of total
passengers for 2011 is 4.0% above 2010. The 2012 budget assumes growth of 1.5%. For 2013 and beyond,
we assume a long-term growth rate of 2.2%. This is consistent with the Federal Aviation Administration's
(FAA) December 2009 long-term forecast for Sea-Tac Airport. Current and long-term cost management
continues to be a strategic focus of Sea-Tac Airport.
Operating revenues are budgeted to be $387.0 million, a $24.3 million or 6.7% increase from 2011 budget.
Aeronautical revenues are budgeted to increase by $18.4 million or 8.5% while non-airline revenues are
budgeted to increase by $5.9 million or 4.0% compared to 2011 budget.
Total airport operating expenses are budgeted to total $225.0 million. This represents a 11.9% increase
compared to the 2011 budget. For the Aviation Division alone, the 2012 budget is increasing by 15.2%
primarily due to the new consolidated rental car facility and the terminal realignment. Net operating income
before depreciation is $162.0 million.
SEAPORT DIVISION
The Seaport includes two major business groups: Lease & Asset Management and Cruise & Maritime
Operations. There are also service groups within the Seaport Division. Commercial Strategy, which focuses
on marketing container assets, Environmental Services & Planning, and Finance. These businesses and
service groups oversee the development and management of cargo and cruise terminals, moorage facilities,
and industrial properties connected to these businesses.
The most critical measure of the Seaport's financial sustainability is a growing, positive Net Operating
Income (NOI). Only with strong financial performance, can the Seaport provide the economic, community
and environmental benefits that are the essence of its mission.
Seaport operating revenues are $98.6 million. Total operating expenses including corporate costs are $46.5
million. Net operating income before depreciation is $52.0 million.
REAL ESTATE DIVISION
The Real Estate Division is committed to increasing the economic vitality of our region and generating new
business opportunities for the Port. This will be accomplished by leveraging the Port's partnerships with
local and regional commercial and industrial businesses and real estate partners. The Real Estate Division
also intends to identify and pursue opportunities that enhance the region's long-term vitality and ultimately
produce new revenue for the Port.
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Port of Seattle 2012 Preliminary Budget
The Real Estate Division integrates the efforts of five functional workgroups: Real Estate Development &
Planning, Harbor Services, Marine Maintenance, Portfolio Management and Pier 69 Facilities Management.
These business and service groups oversee the development and management of various Port assets and
vessel moorage facilities. Financial services, project management, facility planning, and environmental
services are acquired from the Seaport Division.
Real Estate operating revenues are $32.4 million. Total operating expenses including corporate costs are
$37.2 million. Net operating loss before depreciation is $4.8 million.
CAPITAL DEVELOPMENT DIVISION
The Capital Development Division (CDD) delivers projects and provides technical and contracting services
in support of the business plans and infrastructure needs of the Port. The three operating divisions of the Port
are supported by the CDD based on level of project and contracting services required to support their
operations and capital & expense project needs. The services by the departments within the division are
demand driven.
Operating expenses for Capital Development Division are $15.5 million for 2012.
CORPORATE
The three operating divisions and Capital Development division are supported by a number of functional
departments as well as service groups. These functional and service groups allocate their expenses according
to the level of service they provide to the divisions.
Many of the corporate departments are vital to the success of the operating divisions for providing essential
services such as accounting, legal services, computer support, etc. Their services also benefit the public in
general and play an indirect role in the success of the operating divisions.
Operating expenses for Corporate are $76.5 million for 2012.
NON-OPERATING REVENUE AND EXPENSE
Non-operating revenues are budgeted to be $205.1 million and non-operating expenses are budgeted to be
$172.1 million; net non-operating income is budgeted at $33.0 million. The budget contains a tax levy
amount of $73.5 million. The millage rate is estimated to be $0.2329/1000.
CASH FLOW SUMMARY
Table I-2 from section I, page 6, reveals that operating revenues will make up 71.6% of the Port's budgeted
cash receipts for 2012. The tax levy is projected to be $ 73.5 million and accounts for 10.2% of total
budgeted receipts in 2012.
Total cash outlays are budgeted to be $1.01 billion for 2012. Of this amount, capital expenditures make up
the largest portion, $406.4 million or 40.0%. By comparison, total operating expenses (including Operating
& Maintenance, Corporate Administrative, Law Enforcement Costs and Environmental Reserve) will make
up 30.5%.
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Port of Seattle 2012 Preliminary Budget
TABLE III-2: REVENUES, EXPENSES, AND NET ASSETS
($ in 000's) 2008 2009 2010 2011 2011 2012
Notes Actual Actual Actual Budget Forecast Budget
OPERATING REVENUES:
Services $ 187,791 $ 163,983 $ 174,562 $ 184,690 $ 183,458 $ 206,499
Property rentals 286,139 274,584 284,898 303,788 303,072 308,838
Fuel Hydrant facility revenues 2,926 7,845 7,911 7,839 7,839 -
Operating grant and contract revenues 1,667 3,023 3,119 4,320 2,995 2,758
Total operating revenue 478,523 449,435 470,490 500,636 497,364 518,095
OPERATING EXPENSES BEFORE DEPRECIATION:
Operations and maintenance 209,960 182,995 188,678 214,793 204,118 236,788
Law enforcement 20,221 19,136 19,949 22,180 22,439 23,490
Administration 44,438 43,636 44,837 46,600 51,049 46,351
Environmental - - - 2,271 702 3,096
Total operating expenses before depreciation 274,619 245,767 253,464 285,844 278,308 309,725
NET OPERATING INCOME BEFORE DEPRECIATION 203,904 203,668 217,026 214,792 219,056 208,370
DEPRECIATION 144,208 157,068 160,775 160,491 160,491 158,479
OPERATING INCOME 59,696 46,600 56,251 54,301 58,565 49,891
NON-OPERATING INCOME (EXPENSE):
Ad valorem tax levy revenue 75,680 75,587 73,125 73,500 73,500 73,500
Passenger facility charges revenue 60,708 59,689 59,744 60,379 61,933 63,448
Customer facility charges revenue 22,947 21,866 23,243 22,237 23,275 21,333
Fuel hydrant income - - 7,839
Non Capital Grants and donations 10,473 7,153 12,473 8,493 8,493 1,779
Investment income - net 39,004 17,251 13,096 13,654 13,654 5,748
Revenue and capital appreciation bond interest expense (105,517) (121,148) (133,239) (148,206) (148,206) (135,806)
Passenger facility charges revenue bond interest expense (11,412) (10,956) (10,187) (10,191) (10,191) (6,826)
General obligation bond interest expense (17,059) (15,785) (17,463) (13,780) (13,780) (14,926)
Public Expense (27,494) (20,370) (25,085) (17,205) (17,205) (5,654)
Non-Op Environmental Expense - net (5,659) (14,676) (22,730) (6,200) (6,200) (5,290)
Other (expense) income - net 848 (10,003) (7,276) (2,521) (2,521) (3,576)
Total non-operating (expense) income - net 42,519 (11,392) (34,299) (19,839) (17,248) 1,568
INCOME BEFORE CAPITAL CONTRIBUTIONS 102,215 35,208 21,952 34,462 41,317 51,459
CAPITAL CONTRIBUTIONS 52,436 76,781 30,519 32,106 32,106 31,448
INCREASE IN NET ASSETS $ 154,651 $ 111,989 $ 52,471 $ 66,568 $ 73,423 $ 82,907
EMPLOYMENT (FTES) 1778.4 1779.3 1696.1 1697.2 1711.2 1792.7
Notes: Fuel Hydrant revenue was reclassified from Operating to Non-Operating revenue beginning in 2012. BDREVEXP
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Port of Seattle 2012 Preliminary Budget
TABLE III-3: REVENUES AND EXPENSES BY ACCOUNT CATEGORY
($ in 000's) % Change
2010 2011 2012 2012 Bud -
TOTAL PORT Notes Actual Budget Budget 2011 Bud
Operating Revenue
Dckg, Whrfg, Serv & Facility, Passenger Fee $ 2,589 $ 2,210 $ 3,389 53.3%
Equipment Rental 10,105 9,827 8,374 -14.8%
Berthage & Moorage 11,233 11,083 10,378 -6.4%
Landing Fees 56,647 61,200 70,152 14.6%
Airport Transportation Fees 4,814 6,876 7,459 8.5%
Parking Revenue 52,482 56,086 57,036 1.7%
Revenue from Sale of Utilities 11,873 12,185 11,937 -2.0%
Property Rental Revenue 287,981 296,912 301,379 1.5%
Other Revenue 32,764 44,258 47,992 8.4%
Fuel Hydrant non-cash reclass to non-operating 1 (7,912) (7,839) 0 -100.0%
Total Operating Revenue 462,577 492,797 518,095 5.1%
Operating Expense
Salaries, Wages, Benefits & Workers Compensation 175,505 193,300 210,537 8.9%
Equipment Expense 6,444 6,415 5,957 -7.1%
Utilities 19,259 20,696 21,180 2.3%
Supplies & Stock 6,711 6,407 6,739 5.2%
Outside Services 41,407 56,867 62,395 9.7%
Travel & Other Employee Expenses 3,461 5,036 5,524 9.7%
Promotional Expenses 1,120 1,739 1,248 -28.2%
Other Expenses 23,343 26,311 24,235 -7.9%
Total O&M without Environmental 277,249 316,770 337,819 6.6%
Environmental Expense 4,708 2,271 3,096 36.3%
Total O&M with Environmental 281,957 319,041 340,916 6.9%
Charges to Capital Projects (28,493) (33,197) (31,191) -6.0%
Expense after Charges to Capital Projects $ 253,464 $ 285,844 $ 309,725 8.4%
table4.xls
Notes:
1) Fuel Hydrant non-cash recorded as non-operating revenues based on Accounting change.
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Port of Seattle 2012 Preliminary Budget
FIGURE III-1: OPERATING REVENUES BY SOURCE: 2012
($ in 000's)
Dckg, Whrfg, Serv & Equipment Rental
Facility, Passenger Fee 1.6%
0.7%
Fuel Hydrant non-cash Berthage & Moorage
reclass to non-operating 2.0%
0.0%
Other Revenue
9.3% Landing Fees Airport Transportation
13.5% Fees
1.4%
Parking Revenue
11.0%
Property Rental Revenue
58.2%
Revenue from Sale
of Utilities
2.3%
Total Revenue: $518,095
FIGURE III-2: OPERATING EXPENSES BY USAGE: 20 12
($ in 000's)
Other Expenses
Promotional Expenses Environmental Expense
7.1%
0.4% 0.9%
Travel & Other Employee
Expenses
1.6%
Outside Services
18.3%
Salaries, Wages, Benefits
Supplies & Stock & Workers Compensation
Utilities
2.0% 61.8%
6.2%
Equipment Expense
1.7%
Total Expense Before Charges to Capital Projects: $340,916
Charges to Capital Projects: $31,191
Total Expense: $309,725
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Port of Seattle 2012 Preliminary Budget
C. BUDGET OVERVIEW - STAFFING
The 2012 budget proposes an increase of 95.5 Full-time Equivalent positions (FTEs) to 1,792.7 FTEs compared to
1,697.2 FTEs in the 2011 budget.
Aviation, Seaport and Real Estate divisions are budgeting 859.0, 59.9, and 165.8 FTEs, respectively for 2012.
The Capital Development Division is budgeting 255.8 FTEs and Corporate is budgeting 452.2 FTEs.
Aviation is increasing 97.1 FTEs from the approved budget mainly due to 59.0 FTEs for the Rental Car and Bus
Maintenance Facilities, 17.0 FTEs for New Facilities & Asset Management and the others for Customer Service,
Employee and Cost Management and various other initiatives.
Seaport is budgeting 59.9 FTE's for 2012, which is .5 lower than 2011 budget since it eliminated 1.7 FTEs and
added a .4 FTE for the Sr. Financial Analyst to become full-time and a .8 FTE for a Limited Duration Real Estate
Specialist.
Real Estate is budgeting 165.8 FTE's, which is 1.0 higher than 2011 budget, which is for the Real Estate
Development and Planning Assistant position; Capital Development is eliminating 9.8 FTEs, and there is an
increase in Corporate of 4.6 FTEs.
More information for each of these categories is provided in the Aviation, Seaport, Real Estate, Capital
Development Division, and Corporate sections of this document (Sections IV to VIII).
TABLE III-4: PORT S TAFFING BY DIVISION
PORT STAFFING
(Full-Time Equivalent Positions) % Change
2010 2011 2011 2012 12 Bud- 12 Bud-
Divison Note Actual Budget Est. Act. Budget 11 Bud 11 Est
Aviation 746.4 761.9 773.0 859.0 12.7% 11.1%
Seaport 59.4 60.4 59.1 59.9 -0.8% 1.4%
Real Estate 164.8 164.8 164.8 165.8 0.6% 0.6%
Capital Development 268.0 262.5 264.5 255.8 -2.6% -3.3%
Corporate 457.5 447.6 449.8 452.2 1.0% 0.5%
Total FTE's 1,696.1 1,697.2 1,711.2 1,792.7 5.6% 4.8%
FTE.XLS
FIGURE III-3: PORT STAFFING BY DIVISION: 1792.7 FTE's for 2012
Corporate
25.2%
Aviation
Capital Development 47.9%
14.3%
Real Estate
9.2% Seaport
3.3%
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Port of Seattle 2012 Preliminary Budget
D. CAPITAL BUDGET OVERVIEW
For the Port to meet the waterborne and air transportation needs of the region and to serve its customers, it must
invest in the acquisition, development and maintenance of long-term assets. For an organization as large and
diverse as the Port, this requires comprehensive long-term capital planning which synthesizes the existing and
anticipated business environment, careful estimates of customer demand for facilities, available resources, and the
priorities of the organization.
The 2012 Capital Budget reflects the Port's continuing commitment to promoting regional economic activity
through the investment of $406.4 million in the development, expansion, and renewal of Port facilities. For a
complete discussion of the Port's long-term capital and funding plan, refer to Sections X and XI, Capital Budget
and Draft Plan of Finance.
Table III-5 below summarizes divisional spending in the 2012 Capital Budget:
TABLE III-5: CAPITAL BUDGET
($ in 000's) 2012 2012-2016 % of 2012 Total
Committed Capital Projects Budget CIP Committed
Aviation Division $276,926 $443,723 85.1%
Seaport Division 25,706 41,744 7.9%
Corporate & CDD Divisions 11,922 25,175 3.7%
Real Estate Division 10,924 21,325 3.4%
Total Committed $325,478 $531,967 100.0%
Business Plan Prospective Projects $80,901 $976,652
Total CIP $406,379 $1,508,619
capsum.xls
Note: Definitions and details of the capital budget can be found in Section X.
FIGURE III-4: 20 12 COMMITTED CAPITAL BUDGET
Real Estate Division
3.4%
Corporate & CDD
Divisions Total Spending: $325,478
Seaport Division 3.7%
7.9%
Aviation Division
85.1%
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Port of Seattle 2012 Preliminary Budget
E. TAX LEVY
The maximum allowable levy for 2012 is $90.1 million.
For 2012 the levy will be $73.5 million.
The millage rate is estimated to be $0.2329.
The 2012 levy will be used for:
o General Obligation (G.O.) Bond Debt Service
o Public Asset Expense: Freight Mobility
o Seaport and Real Estate Environmental Remediation Liability
o A portion of Real Estate operating expenses
o Capital Improvements
o Office of Port Jobs
FIGURE III-5: TAX LEVY VS. MILL AGE RATE 2002-2012
$ Millions
$80
$75.90 $75.90 $0.70
$73.50 $73.50 $73.50
$68.81
$70
$0.60
$62.78 $62.79
$59.66
$60 $58.00
$0.50
$50
$0.40
$40
$0.26 $0.30
$0.25 $0.25
$30 $0.23 $0.23 $0.22 $0.22 $0.23
$0.22
$0.20
$0.20
$20
$0.10
$10
$0 $0.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Tax Levy (Left Scale) Millage (Right Scale)
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Port of Seattle 2012 Preliminary Budget
AVIATION DIVISION
A. 2012 BUDGET SUMMARY
TABLE IV-1: 2012 CASH FLOW SUMMARY
Percent
($ in 000s) 2012 of Total
SOURCES OF CASH
Operating Revenues $ 386,964 75.1%
Interest Receipts 4,380 0.9%
Proceeds from Bond Issues - 0.0%
Grants and Capital Contributions 30,461 5.9%
Tax Levy 546 0.1%
Passenger Facility Charges 63,448 12.3%
Rental Car Customer Facility Charges 21,333 4.1%
Fuel Hydrant Receipts 7,839 1.5%
Other Receipts 153 0.0%
Total 515,125 100%
USES OF CASH
Expenses from Operations:
Operating & Maintenance expense 157,754 20.2%
Corporate Administrative Expense 47,145 6.0%
Law Enforcement Costs 16,964 2.2%
Environmental Expenditures 3,096 0.4%
Total Operating Expenses 224,959 28.8%
Debt Service:
Interest Payments 129,296 16.5%
Bond Redemptions 78,875 10.1%
Total Debt Service 208,171 26.6%
Other Expenses 1,054 0.1%
Public Expense 650 0.1%
Capital Expenditures 346,834 44.4%
Total $ 781,667 100%
cashflow_av.xls
Note: We built-up a significant cash balance in the past few years due to economic
uncertainty, and we are planning to draw down the cash balance in 2012.
IV-1
Port of Seattle 2012 Preliminary Budget
FIGURE IV-1: SOURCES OF CASH
($ in 000's)
Fuel Hydrant Receipts
Passenger Facility Charges 1.5%
12.3% Rental Car Customer
Facility Charges Other Receipts
Grants and Capital 4.1% 0.0%
Contributions
5.9% Tax Levy
0.1%
Proceeds from Bond Issues
0.0%
Interest Receipts
0.9%
Operating Revenues
75.1%
Total Sources: $515,125
FIGURE IV-2: USES OF CASH
($ in 000's)
Operating & Corporate
Maintenance expense Administrative Expense
20.2% 6.0%
Capital Expenditures
44.4% Law Enforcement Costs
2.2%
Interest Payments
16.5% Environmental
Bond Expenditures
Redemptions 0%
10.1%
Public Expense
0.1% Total Uses: $781,667
Other Expenses
0.1%
IV-2
Port of Seattle 2012 Preliminary Budget
B. BUSINESS PLAN FORECAST
TABLE IV-2: BUSINESS PLAN FORECAST
($ in 000's) Compound
Budget Budget Forecast Growth
OPERATING BUDGET Notes 2011 2012 2013 2014 2015 2016 2011-2016
Airline Revenue $ 217,200 $ 235,619 $ 263,093 $ 276,525 $ 289,057 $ 296,224 6.4%
Non-airline Revenue 144,965 150,831 160,272 166,183 172,804 181,435 4.6%
Fuel Hydrant Facility 8,353 514 514 514 514 514 -42.7%
Fuel Hydrant reclass to non-operating revenues 1 (7,839) 0 0 0 0 0 -100.0%
Total Operating Revenues 362,678 386,964 423,878 443,222 462,374 478,173 5.7%
Operating & Maintenance Expense 137,804 157,754 171,866 164,351 166,705 171,806 4.5%
Corporate & Capital Development Division Costs 2 44,987 47,145 48,559 50,016 51,517 53,062 3.4%
Law Enforcement Costs 16,389 16,964 17,473 17,997 18,537 19,093 3.1%
Environmental Expense 1,771 3,096 3,189 3,285 3,384 3,485 14.5%
Total Operating Expense 200,951 224,959 241,088 235,649 240,142 247,446 4.3%
Net Operating Income Before Depreciation 161,727 162,005 182,791 207,573 222,233 230,727 7.4%
Total Depreciation Expense 118,418 117,072
Net Operating Income After Depreciation 43,310 44,934
Total
2012-2016
Committed Capital Budget 231,408 276,926 117,796 35,973 3,528 9,500 443,723
Business Plan Prospective 71,801 69,908 172,446 137,987 58,713 211,721 650,775
Total Capital Budget 3 $ 303,209 $ 346,834 $ 290,242 $ 173,960 $ 62,241 $ 221,221 $ 1,094,498
AVBPFOR.xls
Notes:
1) Fuel Hydrant non-cash recorded as non-operating revenues based on Accounting change.
2) Consists of direct charges and allocations. Most costs are allocated using a formula based on Expenses and employees. For some departments
specific allocation methodologies, such as employees for Human Resources & Development, are used.
3) See Section X for details of Capital Budget.
TABLE IV-3: AVIATION KEY MEASURES
Budget Forecast
2012 2013 2014 2015 2016
Key Measures
Operating Cost Per Enplanement * 13.32 13.98 13.36 13.32 13.43
Non Airline Revenue Per Enplanement 9.06 9.42 9.56 9.72 9.99
Passenger Airline CPE 13.25 14.42 14.83 15.19 15.24
Debt Service Coverage 1.36 1.37 1.33 1.37 1.39
Traffic (in 000's)
Total Landed Weight 20,444 20,863 21,305 21,757 22,219
Enplanements 16,650 17,017 17,391 17,774 18,165
* excluding Environmental Remediation
AVMEASURES.XLS
IV-3
Port of Seattle 2012 Preliminary Budget
C. DIVISION MISSION STATEMENT
MISSION:
Connecting our region to the world through flight. The journey begins here.
VISION:
We envision that Sea-Tac will be a welcoming front door, embodying the spirit of the Northwest an
economic engine and a source of regional pride.
D. DIVISION BUSINESS PLAN AND STRATEGIES
STRATEGIC GOALS:
1. Operate a world-class international airport by:
Ensuring safe and secure operations
Anticipating and meeting the needs of our tenants, passengers and the region's economy
Managing our assets to minimize the long-term total cost of ownership
2. Become one of the top ten customer service airports in the world by 2015 (measured by the ACI ASQ
index)
3. Lead the airport industry in environmental innovation and minimize the airport's environmental
impacts
4. Reduce airline costs (CPE) as far as possible without compromising operational and capital needs
5. Maximize non-aeronautical net operating income (NOI) consistent with current contracts, appropriate
use of airport properties and market demand
6. Continually invest in a culture of employee development, organizational improvement, and business
agility
7. Develop valued community partnerships based on mutual understanding and socially responsible
practices
ECONOMIC OUTLOOK
As of October 2011, the U.S. economy appears to be in a slow but uncertain economic recovery. Real gross
domestic product growth is low, and unemployment remains high (above 9%). European financial markets are
affected by the poor credit standing of a number of countries (Greece, Portugal, Ireland, and Spain). Since the
strength of the economy is the primary driver behind the demand for air travel, we assume near-term (2012)
growth in passenger levels will be modest (+1.5% in 2012). We are planning fo r a slow economic recovery
during 2012, with growth picking up by 2013. The threat of a double-dip recession remains a possibility.
While this is not part of our baseline assumptions, it does contribute to our conservative outlook, and thus our
forecast assumptions.
PASSENGER GROWTH ASSUMPTIONS
Sea-Tac Airport has experienced positive year-over-year passenger growth each month since June 2010. For
2010, Sea-Tac realized 1.0% growth in enplaned passengers. Domestic passenger growth was 0.5% and
IV-4
Port of Seattle 2012 Preliminary Budget
international growth was 7.3%. For 2011, Sea-Tac has seen continued strong growth with an increase in yearto-date
enplaned passengers of 4.5% through August. International growth (+7.6%) is again outpacing
domestic (+4.2%). The current forecast is for 4.0% growth in 2011, which is significantly above the budget of
1.0%. The demand for air travel has been surprisingly strong in this uncertain economy.
However, in spite of the growth in 2011, we are cautious as we plan for 2012. The 2012 budget assumes
growth of 1.5%. For 2013 and beyond, we assume a long-term growth rate of 2.2%. This is consistent with
the Federal Aviation Administration's (FAA) December 2009 long-term forecast for Sea-Tac Airport.The
December 2010 forecast was more optimistic, but given the continued economic uncertainty, we decided to
retain the more conservative 2009 forecast.
Enplaned passengers in 000s:
19,000
18,000
17,000
16,000
15,000
14,000
13,000
12,000
11,000
10,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Year Assumption
2011 4.0%
2012 1.5%
2013 2.2%
2014 2.2%
2015 2.2%
2016 2.2%
Realizing these assumed growth rates means that Sea-Tac would reach the 2008 enplaned passenger level in
2011. This would mean a total drop of 3% during the Great Recession and a three year recovery. This would
represent a smaller drop and a faster recovery than after 2001.
IV-5
Port of Seattle 2012 Preliminary Budget
AIRLINE INDUSTRY ASSESSMENT
After a decade of turmoil, the domestic airline industry recovered to earn a profit of $3.6 billion in 2010. Still,
since 2001, the industry has posted net profit in only three years and has a cumulative net loss of $54.5 billion.
The industry is expected to be near break-even for 2011. Given the state of the economy, and the relatively
high price of oil during most of 2011, the industry has figured out how to earn a profit in difficult times.
Airlines business strategies have focused on:
Profit not market share - eliminate unprofitable routes
Seasonal capacity changes
Consolidation
Ancillary fees
The price of fuel has hurt the economic viability of smaller aircraft. This has caused many airlines to decrease
service to small markets and focus on larger hubs. According to one industry expert, large hub airports with
limited regional competition and international connections are likely to see growth, whereas many medium
and small airports could see service reductions.
According to the U.S. Department of Transportation's Bureau of Transportation Statistics, U.S airlines
passengers increased 2.3% year-to-date through June 2011 compared to 2010. Through June, Sea-Tac realized
growth of 4.9% in enplaned passengers, significantly above the national average.
Consolidation within the industry continues, with United and Continental, and Southwest and Air Tran
merging in 2011. The impacts of these mergers at Sea-Tac were insignificant due to limited overlap in cities
served by the merging airlines.
Alaska Air Group (parent company of Alaska Airlines and Horizon Airlines), Sea-Tac's largest customer, was
profitable in 2010 and reported record earnings for the Second Quarter 2011. For the first six months of 2011,
Alaska had the highest growth rate of enplaned passengers among the top ten domestic airlines.
AIRPORT COMPARISONS
When comparing airport costs, the most common measure is passenger airline cost per enplanement ("CPE").
CPE is an average unit cost measure that permits a reasonable comparison among airports. It is not a "rate"
that is charged to any individual airline. CPE can be an imperfect measure because there are major differences
among airports for the costs that are included in the numerator of the equation. For example, at some airports,
airlines own and operate terminals. Thus, at those airports, the CPE would be artificially low. One of the
major drivers of increases to an airport's CPE is the capital program. When assets are placed in service, the
debt service and the additional operating costs are charged to the airlines through rates designed to recover
costs. Consequently, airport CPEs tend to peak soon after a major capital program, then gradually decline as
passenger volume increases.
Airports that have strong origin and destination ("O&D") traffic are less vulnerable to the financial problems
of any one carrier than a hub airport. The theory is that if one carrier disappears, the underlying demand for
travel will induce existing carriers to expand service or another carrier to enter the market.
SEA-TAC AIRPORT: BUSINESS ASSESSMENT
Sea-Tac was the seventeenth-largest US airport as measured by total passengers in 2010. As indicated above,
demand for air service proved to be very resilient during the Great Recession and the slow economic recovery
that has followed. The overall drop in passengers since 2008 of 3% was much less than expected, and the
anticipated three year recovery is much faster than expected.
Sea-Tac has a relatively low concentration of service by the dominant carriers. The largest airline (Alaska)
accounted for 35.0% of the enplaned passengers in 2009, and the top three airlines (Alaska, Horizon, and
Delta) accounted for 60.9% of the passenger traffic. Compared to other large airports, Sea-Tac has relatively
high O&D traffic - approximately 74% in 2010. This percentage has declined very slightly since 2003.
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Port of Seattle 2012 Preliminary Budget
Relatively high O&D traffic and relatively low concentration of dominant carriers reduces Sea-Tac's
vulnerability to the effects of any given carrier reducing capacity or suffering financial difficulties. Only
Alaska Airlines uses Sea-Tac as a hub. Alaska's relative financial strength compared to other airlines is a
positive factor for Sea-Tac.
By the end of 2010, Sea-Tac will have invested over $4.0 billion in capital improvements since 1999.
Investments have included rebuilding Concourse A, the Satellite Transit System, the Central Terminal,
constructing the Third Runway, reconstructing Runway 16C, building a remote rental car facility (still under
construction) and rebuilding much of the airport's infrastructure. The costs of these investments are reflected
in higher rates and charges to the airlines as reflected in the CPE.
Current and long-term cost management continues to be a strategic focus of Sea-Tac Airport. For 2010, the
most recent year for which comparable data is available, Sea-Tac's CPE of $11.63 falls in the middle third of
the 26 large hub airports that participated in the ACI Benchmarking Survey. Among western airports
(including medium hubs), Sea-Tac's CPE was below San Francisco, Denver, Sacramento and Portland but
above Los Angeles, Oakland and Salt Lake City.
CHALLENGES AND OPPORTUNITIES
During the development of the business plan, senior staff conducted a SWOT analysis (strengths, weakness,
opportunities, threats). The highlights are presented below:
Key Considerations:
Strong finances: O&D airport; cash flow/reserves; low competition; airline agreement
Anticipate continued growth in international travel, especially Asia
Cargo growth an opportunity
Economic uncertainty: slow recovery, or double dip recessions?
Non-aeronautical NOI increasing, needed for future investments
Major capital requirements: vertical circulation, terminal reallocation, FIS upgrade/replacement
Long-term throughput/efficiency/cost effectiveness of terminal investments
Technology utilization deployments
Long-term planning issues: airport capacity, drives capacity, hotel, south access, cargo development,
off airport property development
Threats to Port control relating to business strategy and investments
STRATEGIC GOALS AND OBJECTIVES FOR 2012-16
For each strategic goal, measurable objectives have been set for the 2012 2016 time-frame.
1.1 Operate a world-class international airport by ensuring safe and secure operations.
A. Reduce wildlife strikes from 28 to 20 per 100,000 operations by 2013.
B. Comply with FAA Safety Management Systems requirements by 2014.
C. Reduce runway incursions by 30% by 2015.
D. Increase airfield's three runways' availability during a snow event from 33% to 55% by 2013.
1.2 Operate a world-class international airport by anticipating and meeting the needs of our tenants,
passengers and the region's economy.
A. Meet critical path business planning items to achieve 2020 capacity needs for the airport.
B. Meet critical path business planning items to achieve 2020 capacity needs for the Air Terminal.
C. Meet critical path business planning items to achieve 2020 capacity needs for the International
Facilities.
IV-7
Port of Seattle 2012 Preliminary Budget
D. Meet critical path business planning items to achieve 2020 capacity needs for the Airfield.
E. Meet critical path business planning items to achieve 2020 capacity needs for Landside.
F. Increase total air cargo to 340,000 metric tons and international cargo to 127,000 metric tons by
2016.
G. Develop three new international routes by 2016 as a net gain in international service to Seattle
International Airport. Develop additional service in two existing markets by 2016.
1.3 Operate a world-class international airport by managing our assets to minimize the long-term total cost of
ownership.
A. Develop an airport-wide Asset Management System by 2016 to minimize the total long-term cost
of ownership resulting in equivalent savings of $200,000 per year compared to pre-2010 average
baseline.
B. Achieve "the industry best in class standard" of 80% of maintenance work is proactively planned.
C. Establish aviation industry key system reliability metrics in order to identify improvement.
opportunities and publish system availability results to key stakeholders.
2.0 Become one of the top ten customer service airports in the world by 2015 (measured by the ACI ASQ
index).
A. Complete comprehensive review of static and dynamic signage by 2014.
B. Complete elevator/escalator refurbishment by 2014.
C. Passenger check-in and bag-drop self-service at 80% airport-wide by 2015.
D. Implement integrated cruise service to passengers by 2015.
E. Fully implement TSA Automated Wait Time system and communications systems by Q2 2012.
F. Create single (consortium- or Port-managed) wheelchair service system by Q2 2012.
G. Complete deployment of electric appliance charging system at gates by 2013.
H. Airport-wide restroom upgrades complete by 2015.
I. Implement recorded elements of Seattle Music initiative by Q4 2011.
J. Airport-wide common bag drop and full interline transfers in place by 2015.
K. Complete upgrade of airport architectural standards to STEP/CTE standard by 2013.
L. Use survey results to drive projects and changes in processes and procedures which in turn will
drive better survey results.
M. Reduce Minimum Connecting Times (I to I and I to D) from 90 to 75mins.
3.0 Lead the airport industry in environmental innovation and minimize the airport's environmental impacts.
A. Air Quality and Climate Change: Sea-Tac will reduce airport owned and controlled greenhouse
gas emissions by 15% below 2005 levels by 2020, and work with its business partners to reduce
their emissions through a variety of cost effective emission reduction projects.
B. Energy and Conservation: Implement conservation projects and practices that will enable it to
meet all future electricity load growth (estimated to be 10% through 2015) through conservation
measures and renewable energy; reduce natural gas consumption per square foot of terminal
(initiatives included under Strategic Goal 4.0).
C. Buildings & Infrastructure: Implement asset management program by 2013.
D. Materials Use & Recycling: Expand recycling programs and infrastructure in terminal in
furtherance of goal to increase the solid waste recycling rate to 50% by 2014.
E. Resources: Reduce potable water consumption rate 5% below 2008 levels by 2015.
IV-8
Port of Seattle 2012 Preliminary Budget
F. Education & Integration: Complete terminal environmental education pilot program by 2013 and
assess the effectiveness of the program; By 2013, incorporate best practices /opportunities to
advance environmental goals into lease and operating agreements.
G. Noise: Sea-Tac will complete the Part 150 update including FAA review and approval by the end
of 2012 (Initiatives included under Strategic Goal 7.0)
4.0 Reduce airline costs (CPE) as far as possible without compromising operational and capital needs.
A. CPE below $14.00 through 2016.
B. 2016, achieve $1 million in savings from continuous processes improvements.
C. Implement conservation practices that will enable airport to meet all future electricity load growth
(2010 baseline) through conservation and renewable energy.
D. Implement pilot program for security exits by December, 2012.
5.0 Maximize non-aeronautical net operating income (NOI) consistent with current contracts, appropriate use
of airport properties and market demand.
A. Concessions: Grow concessions sales per enplanement by 3 -5% CAGR through 2016.
B. Parking: Grow parking revenues by 5% CAGR through 2016.
C. Real Estate: Grow annual revenues by $1.3 million by 2016.
D. Other revenues: Grow other non -aeronautical revenues by $1.2 million by 2016.
6.0 Continually invest in a culture of employee development, organizational improvement, and business
agility.
A. Increase internal candidate promotion success rate by (TBD)% by 2016.
B. Reduce the average time to hire for Aviation division positions from (TBD) days to (TBD) days
without (1) compromising the validity and integrity of the process or (2) the quality of candidates.
C. Develop and implement system of performance measurement and management to align strategic
goals with division and individual performance objectives by December 2013.
D. Address all of the FEMA exercise improvements by 2014.
7.0 Develop valued community partnerships based on mutual understanding and socially responsible
practices.
A. Staff will implement all Commission and FAA approved FAR Part 150 recommendations by
2016.
B. During the next five years, the Port, local cities and/or businesses will be successful in
implementing solutions to land development and other issues.
C. The Airport will achieve specific Division milestones, a 2012 small business goal of 10% for
goods and services; expansion of the limited-English outreach program beyond the noise program;
and successful implementation of the Concession's Program DBE program.
The following sections highlight the key initiatives organized by strategic goal for the 2012 2016 capital
budget and the 2012 operating budget.
Capital Budget Summary
From 1999 to 2010, the Aviation Division has invested approximately $4.0 billion in capital improvements at
the airport. While the comparative average pace of spending will decline (after a rise in 2012), Aviation still
expects to invest $1.1 billion during the five year period from 2012-2016. 2012 will mark a high point due to
IV-9
Port of Seattle 2012 Preliminary Budget
a few major projects that are in-process, including: Rental Car Facility, Escalator Replacement, Pre-
Conditioned Air, Electrical Ground Support Equipment infrastructure, charging stations and rolling stock, and
elements of the Terminal Realignment such as the acquisition of passenger loading bridges.
As a result of the 2012 budget process, 17 projects are proposed to be added to the capital program, bringing
the total number of projects to 144. These new projects total $107 million and have achieved Aviation
division approval as "business plan prospective." This means additional design work is required to finalize the
scope, schedule, and budget associated with each project prior to requesting Commission authorization.
The capital projects are at various stages of approval with Port Commission. Projects have been organized in
the following categories:
A. Commission authorized/underway
B. Pending 2012 authorization
C. Pending future authorization
D. Small projects
($ in 000's) No. of Total
Category Project 2012 2013 2014 2015 2016 2012-16
A. Com. Auth/Underway 82 $ 256,475 $ 108,860 $ 34,773 $ 3,240 $ 9,500 $ 412,848
B. Pending 2012 Auth 52 72,912 153,899 94,987 11,146 500 333,444
C. Pending Future Auth 9 11,205 20,025 40,000 44,567 208,221 324,018
D. Small Projects 6 6,242 7,458 4,200 3,288 3,000 24,188
Total 149 $ 346,834 $ 290,242 $ 173,960 $ 62,241 $ 221,221 $ 1,094,498
Included in Category A are projects that have been partially but not fully authorized by the Port
Commission.
Capital Program by Strategic Driver:
($ in 000's) 2011 2012 2013 2014 2015 2016 Total
Strategic Driver 2012-16
Safety & Security $ 2,398 $ 7,360 $ 4,846 $ 4,770 $ 2,740 $ - $ 19,716
Capacity & Customer Needs 121,466 151,202 133,932 54,959 3,288 12,000 355,381
Manage Assets 28,503 83,444 97,833 50,334 12,146 83,721 327,478
Customer Service 4,671 17,546 3,500 1,304 500 500 23,350
Environmental 1,614 500 500 385 1,385
Reduce CPE 21,570 52,715 17,326 3,500 73,541
Non-Aeronautical 2,669 7,252 5,988 242 13,482
Community Partnership 4,782 15,660 6,317 18,966 40,943
Subtotal 187,673 335,679 270,242 134,460 18,674 96,221 855,276
Allowances 1,729 11,155 20,000 39,500 43,567 125,000 239,222
Total $ 189,402 $ 346,834 $ 290,242 $ 173,960 $ 62,241 $ 221,221 $ 1,094,498
Allowance CIPs are used for purposes of reflecting undesignated future spending in the financial
forecast. As new projects are approved, the budget is deducted from an allowance CIP so that the total
capital program does not change.
IV-10
Port of Seattle 2012 Preliminary Budget
New Projects:
($ in 000's)
AERONAUTICAL PROJECTS:
Safe and Secure Operations
Bollards for Upper & Lower Drive Doors $ 500
Capacity & Customer Needs
Snow Removal Equipment 2,000
New Window Wall Kiosks at Ticket Zone 1 5,566
Convert Ticket Zone 2 to a "Pushback" 10,669
Convert Ticket Zone 3 FlowThru 32,000
Cargo 6 Enhancements 5,550
South Access Property Acq. 1,500
Perm Emergency Back-up Power 30,238
Manage Facility Assets
Fire Station Electrical Service Upgrade 2,030
Facility Monitoring System Renewal 5,000
Mechanical Controls System Improvements 1,800
Customer Service
Security Checkpoint Electronic Wayfinding 900
Laptop Power Plugs in Concourses 3,000
Reduce Airline Costs (CPE)
Lighting Upgrades for Energy Efficiency 3,000
Rubber and Paint Removal Equipment 600
IWS sensors to allow high BOD Segregation 1,000
NON-AERONAUTICAL (NOI) PROJECTS:
Manage Facility Assets
Paving Improvements at Port Surface Parking Lot (D Fox) 1,665
Total $ 107,018
IV-11
Port of Seattle 2012 Preliminary Budget
The following tables show details of the capital program organized by strategic goal. New projects are
highlighted in yellow.
Safe & Secure Airport
($ in 000's) 2011 Total
Project Description Estimate 2012 2013 2014 2015 2016 2012-16
North Satellite Seismic $ 25 $ 450 $ 2,200 $ 4,770 $ 2,740 $ 10,160
Lagoon 3 Bird Wires 20 1,611 1,611
Access Control Door Additions 230 1,570 1,570
ALCMS Upgrades 911 1,189 1,189
Additional AF Mitigation at Ty 179 500 119 619
Emergency Lighting - Parking 150 600 600
Bollards for U&L Drive Doors 500 500
Security Checkpoint Cameras 400 100 100
All Other 483 840 2,527 - - - 3,367
Total $ 2,398 $ 7,360 $ 4,846 $ 4,770 $ 2,740 $ - $ 19,716
New Projects:
Bollards for upper and lower drive doors this project will install bollards outside each door to
prevent vehicles from entering.
Existing Projects:
North Satellite Seismic seismic improvements to the North Satellite will be done in conjunction with
other improvement projects for the North Satellite.
Capacity and Customer Needs:
($ in 000's) 2011 Total
Project Description Estimate 2012 2013 2014 2015 2016 2012-16
Rental Car Facility and Buses $ 90,399 $ 59,129 $ 59,129
Aircraft RON Parking USPS Site 467 4,750 30,566 3,000 38,316
Convert Ticket Zone 3 FlowThru 1,000 26,000 5,000 32,000
FIS Improvements- Phase 1 119 14,000 17,581 31,581
Perm Emergency Back-up Power 2,000 7,000 21,238 30,238
Terminal Realignment 8,000 11,000 5,027 24,027
Cargo 2 West Cargo Hardstand 100 2,200 11,000 13,300
PLB Replacement-AR 2,441 10,909 1,500 12,409
Convert Ticket Zone 2 Pushback 1,000 8,000 1,669 10,669
New Window Wall Ticket Zone 1 750 4,750 66 5,566
Cargo 6 Enhancements 550 4,900 100 5,550
Snow Removal Equipment - 2013 100 1,900 2,000
South Access Property Acq. 1,500 1,500
Airport Owned Gate Infrastruct 1,443 1,316 1,316
All Other 26,597 46,098 18,535 7,859 3,288 12,000 87,780
Total $ 121,466 $ 151,202 $ 133,932 $ 54,959 $ 3,288 $ 12,000 $ 355,381
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Port of Seattle 2012 Preliminary Budget
New Projects:
There are three new projects aimed at addressing capacity needs for ticketing at the south end of the
terminal: New Window Wall for Ticketing Zone 1, Convert Ticketing Zone to a pushback, and
Convert Ticketing Zone 3 to flow through.
Permanent Emergency Back-up Power is intended to allow the airport to be fully operational in the
event of a power outage. Sea-Tac is recognized as a valuable regional asset in the event of a major
emergency. Maintaining power is essential for operations.
Cargo 6 Enhancements will expand the concrete area to allow for simultaneous loading, and will
provide ground power and fuel hydrants for environmental benefits and operational efficiency
purposes.
Snow Removal Equipment This project will add capacity and replace aging equipment.
South Access Property Acquisition This project will preserve the Airport's ability to develop a south
access roadway to the airport.
Existing Projects:
Aircraft RON Parking At the USPS site, this project will develop needed overnight parking positions
for aircraft.
FIS Improvements - Phase I This project will increase capacity in the existing Federal Inspections
Area for international arrivals by adding queuing space, adding baggage claim capacity, and
reconfiguring space.
The new consolidated rental car facility is scheduled to open in the spring of 2012
Manage Assets
($ in 000's) 2011 Total
Project Description Estimate 2012 2013 2014 2015 2016 2012-16
Terminal Escalators Modn $ 7,419 $ 17,000 $ 6,300 $ 6,606 $ 29,906
Airfield Pavement Replacement 4,611 2,100 23,901 26,001
SSAT HVAC,Lights,Ceiling Repl 129 3,000 15,000 9,371 27,371
Vertical Convey Modn Aero Ph2 302 5,000 9,000 5,432 19,432
8th Floor Weather Proofing 2,423 10,482 10,482
Vertical Convey Modn Aero Ph1 200 7,454 2,506 9,960
Facility Monitoring Sys Renewl 1,000 2,500 1,500 5,000
Service Tunnel Renewal/Replace 25 1,000 1,200 2,500 275 4,975
2011-2013 Roof Replacement Pro 200 4,577 4,577
Fire Dept Facility Upgrade 500 3,000 3,500
Fire Station Elec Service Upgr 500 1,530 2,030
Airportwide Mech Controls Sys 250 1,550 1,800
Doug Fox Site Improvements 5 365 1,295 1,660
All Other 13,189 30,216 30,051 24,925 11,871 83,721 180,784
Total $ 28,503 $ 83,444 $ 97,833 $ 50,334 $ 12,146 $ 83,721 $ 327,478
New Projects:
Facility Monitoring System Renewal This project will replace the system that monitors all baggage
systems and most elevators, escalators, and moving walkways. The system will be expanded to cover
passenger loading bridges.
Fire Station Electrical Service Upgrade This project is necessary to permit other upgrades to the Fire
Station.
IV-13
Port of Seattle 2012 Preliminary Budget
Airport-wide Mechanical Controls System The system consists of a large local area network of
conduit and wiring that interconnects mechanical equipment with the Central Mechanical Plant. The
system is in need up replacement and upgrade.
Existing Projects:
Aircraft RON Parking At the USPS site, this project will develop needed overnight parking positions
for aircraft.
South Satellite HVAC, Lighting and Ceiling Replacement This project replaces forty-year old,
inefficient and aging heating and air conditioning system to provide increased passenger comfort.
Airfield Pavement Replacement This project replaces panels and expansion joints for the highest
priority areas each year.
Customer Service
($ in 000's) 2011 Total
Project Description Estimate 2012 2013 2014 2015 2016 2012-16
Loading Bridges Utilities $ 167 $ 10,907 $ 10,907
FIMS Phase II 2,562 4,214 4,214
Laptop Power in Concourses 300 2,200 500 3,000
Security Checkpoint Wayfinding 400 500 900
All Other 1,942 1,725 800 804 500 500 4,329
Total $ 4,671 $ 17,546 $ 3,500 $ 1,304 $ 500 $ 500 $ 23,350
New Projects:
Laptop Power in Concourses This project will add about 70 electric power recharging stations at
gate hold rooms.
Security Checkpoint Wayfinding This project, to be done in coordination with TSA, will track and
display the average wait times at the checkpoints, allowing customers to move to checkpoints with
shorter lines.
Reduce Airline Costs
Many of the projects listed below are key elements of the Airport's strategy to achieve its environmental goals.
They are listed here because the projects are justified based on financial measures.
($ in 000's) 2011 Total
Project Description Estimate 2012 2013 2014 2015 2016 2012-16
EGSE Rolling Stock $ 5,059 $ 24,941 $ 24,941
Cent Plant Preconditioned Air 15,077 15,653 5,332 20,985
GSE Electrical Chrg Stations 371 6,000 7,924 13,924
Airport Owned Gate Infr II 2,000 2,000 2,000 6,000
Lighting Upgrades for Energy E 300 1,200 1,500 3,000
Stage 2 Mech Energy Implement 20 2,000 70 2,070
IWS BOD Segregation Improvement 200 800 1,000
Rubber and Paint Removal Equip 600 600
All Other 1,043 1,021 1,021
Total $ 21,570 $ 52,715 $ 17,326 $ 3,500 $ 73,541
IV-14
Port of Seattle 2012 Preliminary Budget
New Projects:
Lighting Upgrades for Energy Efficiency This project will replace aging, inefficient light fixtures in
order to reduce electrical consumption and save costs.
IWS BOD Segregation Improvements This project will install flow metering capabilities to enable
improved segregation of high BOD (biochemical oxygen demand) discharges (e.g., glycol) to reduce
the amount of IWS that is required to be directed to sewer lines. Savings will be achieved through
lower sewer bills.
Rubber and Paint Removal Equipment The Airport currently pays a contractor to perform this work.
By acquiring the equipment and doing the work in-house, annual savings will be realized beginning in
the first year.
Existing Projects:
EGSE Rolling Stock and Electrical Charge Stations Electrifying ground support equipment will
reduce air emissions and save airlines fuel and maintenance costs.
Central Plant Pre-conditioned Air - this project allows aircraft to "plug-in" to the terminal to get heat
or air conditioning. This allows the jet engine to be turned off to minimize noise, air emissions, and
save fuel.
Non-Aeronautical NOI
($ in 000's) 2011 Total
Project Description Estimate 2012 2013 2014 2015 2016 2012-16
Parking Retrofit $ 995 $ 1,850 $ 4,755 $ 6,605
South Sat Concessions Project 230 1,618 1,618
Parking Garage Light Retrofit 25 500 975 1,475
Concessions Unit Readiness Pro 641 1,222 1,222
GML Arrivals Hall Concessions 25 625 158 783
Common Use Lounge Remodel 236 735 735
All Other 517 702 100 242 1,044
Total $ 2,669 $ 7,252 $ 5,988 $ 242 $ 13,482
Existing Projects:
Parking Retrofit this project will reconfigure the parking stall arrangement on the first and second
floors of the parking garage after the rental car companies move to the new facility in mid-2012.
IV-15
Port of Seattle 2012 Preliminary Budget
Summary of 2012 2016 CIP
$400
$350
Allowance CIPs
New Projects
$300
Rental Car Facility
Existing CIPs
$250
$200
$150
$100
$50
$0
2011 2012 2013 2014 2015 2016
New projects proposed for approval will primarily impact spending in 2013 and 2014.
Reconstruction of Runway 16C is planned for 2016.
Allowance CIPs represent undesignated future spending. When new projects are approved, the budget
is transferred from the allowance CIP, resulting in no net change in the capital budget.
E. 2012 OPERATING BUDGET SUMMARY
Background
The Aviation division responded to the economic crisis facing the airline industry in 2008 and 2009 by
deferring budgeted costs and making significant cuts in 2009 for the 2010 budget. Aviation cut over 10% of
its FTEs. While the state of the overall economy remains a concern, the strong growth in passengers seen so
far in 2011 (+4.5% through August) , and the fact that Sea-Tac will likely surpass the 2008 passenger levels in
2011 means the Airport must cautiously plan for future growth.
From a financial perspective, the Aviation Division has two sides of its business: Aeronautical and Nonaeronautical.
On the Aeronautical side, where airline rates are set to recover costs, the Port's goal is to manage
costs. The primary measure of an airport's cost to the airlines is the airline cost per enplanement (CPE). The
"costs" include the operating and maintenance costs attributable to the airfield and the airline share of the
terminal operating and maintenance costs (based on the percentage of revenue producing space split between
airlines and other Port tenants), as well as the corresponding capital costs (either debt service or equity
IV-16
Port of Seattle 2012 Preliminary Budget
amortization). The Port does not charge airlines for the capital costs of any asset funded by Passenger Facility
Charges (PFCs) or grants.
On the Non-aeronautical side of the business, the primary goal is to increase cash flow as measured by net
operating income (NOI). The net cash flow can be used to directly fund capital improvements and build up
cash reserves to meet liquidity targets. Another benefit of increasing NOI is to avoid having to charge the
airlines for debt service coverage above 1.0x for rates and charges purposes. Under the terms of the airline
agreement, if total airport debt service coverage is projected to drop below 1.25x, the airport can charge the
airlines debt service coverage in rates and charges (up to 1.25x) in order to achieve the overall 1.25x debt
service coverage level for the division.
Overview of Major Changes in 2012 Budget
The 2012 budget is largely defined by two major events: the opening of the consolidated rental car facility
(RCF), and the terminal realignment. The rental car facility is scheduled to open in April of 2012. The
Airport will be responsible for all busing operations between the Airport and the RCF. Consequently, the
Aviation division is adding significant staff to operate and maintain the buses, and to operate and maintain the
new Bus Maintenance Facility. The Airport will add 59 FTEs and $6.6 million in operating costs to the 2012
budget. The terminal realignment involves a number of airline moves within the terminal to accommodate
merged airlines (Delta & Northwest; United and Continental; Southwest and Air Tran) and to facilitate the
consolidation of operations for Alaska Air Group (Alaska Airlines and Horizon) at Concourse C and the North
Satellite. The realignment involves both capital and operating costs. The Airport will incur operating costs of
approximately $8.2 million in 2012 for project oversight of tenant projects and to reimburse airlines for
moving costs.
Revenues
Operating revenues are budgeted to increase by $24.2 million or 6.7% compared to the 2011 budget, but
increase by $26.8 million over the 2011 forecast. Compared to the 2011 budget, 2012 airline revenues are
budgeted to increase by $18.4 million (8.5%), while non-airline revenues are budgeted to increase by $5.9
million (4.0%).
Airline revenues, in accordance with the terms of the Signatory Lease and Operating Agreement (SLOA), are
based on cost recovery. Costs in the rate base include both operating costs and capital costs (debt service and
asset amortization). Aeronautical rate base capital costs are increasing $4.8 million due to increased debt
service and asset amortization. Aeronautical rate base operating costs are increasing by $14.5 million, driven
by increases relating to terminal realignment. Total aeronautical revenues are budgeted to increase by $18.5
million.
Non-aeronautical revenues are budgeted to increase by $5.9 million over the 2011 budget due to increased
Customer Facility Charge revenues to pay for the operating costs associated with the RCF and related busing
operations. In 2012 the Airport will see a drop in rental car revenues due to the exchange of space rent in the
garage for land rent at the new RCF. Rental car revenues will be further reduced by a lease incentive to
complete all tenant improvements on-time for opening. These reductions in rental car revenues will offset
solid growth in concessions revenues and modest growth in public parking revenues.
Operating Expense Drivers
Total airport operating expenses (including Corporate costs and environmental remediation costs) are budgeted
to total $224.96 million. This represents an 11.9% increase compared to the 2011 budget. For the Aviation
Division alone, the 2012 budget is increasing by $21.3 million, or15.2%. The following table shows the major
drivers of the increase. The RCF and the Terminal Realignment account for an increase of $11.8 million.
Cost increases for salary, wages and benefits and other contractual increases account for another $5.8 million.
Environmental remediation relating to capital projects accounts for another $1.3 million. These largely nondiscretionary
items thus account for $18.6 million, or a 13.3% increase. The other net additions to the 2012
budget amount to $2.7 million, or a 1.9% increase over 2011 budget.
IV-17
Port of Seattle 2012 Preliminary Budget
Aviation 2012 Budget Summary Compared to 2011 Budget:
$000s %
2011 Budget 139,575
Cost increases (compensation, contractual) 5,837 4.2%
Rental Car Facility & Busing 6,609 4.7%
Increase in Terminal Realignment 5,200 3.7%
Decrease of Grant funded operating costs (405) -0.3%
Increase in Environmental Remediation Liab 1,325 0.9%
Subtotal 18,566 13.3%
Budget Requests 7,796
Net savings/one-time items (5,087)
Subtotal 2,709 1.9%
Total increase 21,276 15.2%
2012 Budget 160,850
$000s
Operating & Maintenance Expense 157,754
Environmental Remediation 3,096
Total Operating Expense 160,850
Each year, one-time expenditures funded by grants are excluded from the baseline budget. The
environmental liability expense relates to asbestos removal costs associated capital projects. Since the
timing and amount is driven by the capital budget, these costs are also excluded from the baseline
budget.
The payroll cost increases represent the costs prior to adding cost associated with new FTEs and prior
to a modification in salary benefits to have staff contribute more to the cost of medical benefits.
Net savings includes FTE reductions and changes to salary benefits rate to have employees contribute
more to health care costs as well as the elimination of one-time items included in the 2011 budget.
The budget requests that total $7.8 million, and which are included in the net increase of $2.7 million will be
presented by strategic driver, first in a summary, then in detail in subsequent tables.
IV-18
Port of Seattle 2012 Preliminary Budget
Summary of Budget Requests
New Requests: $000s FTEs
Safe/Secure Airport 659 3
Customer needs/capacity 980 1
Asset Management:
New Facilities/Assets 1,409 12
Maintenance Resource Alignment 1,501 5
Total 2,910
Customer service 864 2
Airline cost management 428 2
Non-Aero revenue development:
Costs offset by new revenues 808 -
Future revenue development costs 802 -
Total 1,609
Other 347 2
Total 7,796 27
Safe/Secure Airport
Description $000s FTEs
Wildlife Specialist 75 1
Painters 171 2
Safety Mgmt System Impl & Facilitation 108
Other 305
Total 659 3
Wildlife Specialist FTE allows for studies to be done in- house to reduce consulting costs and invasive
species presence to customers/aircraft.
Painter FTEs will update striping to assuage safety concerns on the Airfield.
Capacity and Customer Needs
Description $000s FTEs
Master Plan 230
Terminal development strategy planning 200
Joint Marketing Expense 300
Airfield project planning and analysis 100
Air service development FTE 75 1
Other 75
Total 980 1
Master Plan and Terminal Development Strategy planning will integrate all new initiatives to increase
efficiency and meet capacity needs.
Joint marketing expenses and FTE in Air Service Development will contribute to attracting and
incentivizing new international service to Sea-Tac Airport.
IV-19
Port of Seattle 2012 Preliminary Budget
New Facilities
Description $000s FTEs
Common Use System support 204 2
Airfield lighting photometrics 195 2
Airfield crew 3rd runway 193 3
Pre-conditioned air system 515 5
Landscaping 156
Other 146
Total 1,409 12
Pre- conditioned air was estimated at $800K annual O&M costs in 2010.
Third runway became operational in late 2008, but staffing for airfield crew was not increased.
Additi onal workload can't be accomplished with current staffing levels.
Electrical technicians support common use system.
Airfield photo- metrics initiative supports compliance with FAA regulations.
Maintenance Resource Alignment
Description $000s FTEs
Mechanical Systems Support 149 2
STS Electronic Tech and materials 217 2
STS Auto mechanics 88 1
Conveyor shop materials 160
Cargo building mgmt ($500K new revenues) 585
Outside fence property cleanup 100
Other 202
Total 1,501 5
The STS cars run approximately 45% more miles compared to 2004, or 150,000 miles annually.
Electronic technicians and auto mechanics will support increasing STS operations.
Mechanical systems support positions restore two of five positions eliminated in 2009.
Cargo building management initiative will bring in $500,000 revenues as cargo pass-through costs.
IV-20
Port of Seattle 2012 Preliminary Budget
Non-aeronautical Revenue Development:
Description $000s
Offset by New 2012 Revenues:
Tenant marketing expense increase 100
Public parking marketing and promotion 430
Conference center video equip& advertising 64
Club International 214
Subtotal 808
Future Revenue Development Costs:
Concession leasing and planning 300
Land Development: Brokerage Commission 234
Land Development Planning 250
Other 18
Subtotal 802
Total 1,609
Public parking marketing and promotion should drive an additional $1.1 million in 2012 revenue.
An increase to tenant marketing expenses is in proportion to revenue for the tenant marketing fund.
Real estate study and pre-developments activities are necessary to prepare properties in 2012 for
potential revenue generation in future years.
Customer Service
Description $000s FTEs
Enhanced elevator/escalator service 500
Loading bridge and garage lobby flooring 133
Carpenter 62 1
Sign Writer 65 1
Other 104
Total 864 2
Escalator replacement project drives need for enhanced service
Additional Sign Writer FTE will cut lead time of sign projects by 50%.
Airline Cost Management
Description $000s FTEs
Energy Management 257 2
Continuous Process Improvement 110
Other 61
Total 428 2
Energy management team will perform ongoing dynamic air and water balancing for all HVAC
systems at Sea-Tac which will reduce future electrical consumption and save costs.
Consultant support for Continuous Process Improvement initiative is continued in 2012.
IV-21
Port of Seattle 2012 Preliminary Budget
Other New Initiatives
Description $000s FTEs
Maintenance Budget Specialist 50 1
Wetland Re-delineation 125
Part 150 97
Undergraduate and Graduate Internship 40 1
RCF Opening Celebration 15
Other 20
Total 347 2.00
Wetlands Re-delineation is required.
Aeronautical Summary
2009 2010 2011 2011 2012 '12-'11 Bud Change
$ in 000's Actual Actual Budget Forecast Budget Var $ Var %
Revenues requirement:
Capital Costs $ 72,013 $ 82,083 $ 87,111 $ 85,554 $ 91,876 $ 4,765 5.5%
Operating Costs net Non-Aero 118,456 122,985 137,195 135,793 151,748 14,553 10.6%
Total Costs 190,469 205,067 224,305 221,348 243,624 19,319 8.6%
FIS Offset (5,250) (7,000) (7,000) (7,000) (8,000) (1,000) 14.3%
Other Offsets (16,441) (15,767) (14,821) (14,882) (15,202) (381) 2.6%
Net Revenue Requirement 168,778 182,300 202,485 199,466 220,422 17,937 8.9%
Other Aero Revenues 13,757 16,029 14,715 14,715 15,197 482 3.3%
Total Aero Revenues 182,534 198,329 217,200 214,181 235,619 18,419 8.5%
Non-passenger Airline Costs 12,074 14,885 15,066 15,566 14,989 (78) -0.5%
Net Pasenger Airline Costs $ 170,460 $ 183,444 $ 202,133 $ 198,614 $ 220,630 $ 18,497 9.2%
Aeronautical Key Measures
2009 2010 2011 2011 2012 12-'11 Bud Change
Actual Actual Budget Forecast Budget Var $ Var %
CPE:
Capital Costs / Enpl 4.61 5.20 5.50 5.22 5.52 0.02 0.4%
Operating Costs / Enpl 7.59 7.80 8.66 8.28 9.11 0.46 5.3%
Offsets (1.39) (1.44) (1.38) (1.33) (1.39) (0.02) 1.2%
Other Aero Revenues 0.88 1.02 0.93 0.90 0.91 (0.02) -1.7%
Non-passenger Airline Costs (0.77) (0.94) (0.95) (0.95) (0.90) 0.05 -5.3%
Passenger Airline CPE 10.92 11.63 12.76 12.11 13.25 0.49 3.9%
Highlights:
Airline revenues are based on cost-recovery formulas.
Major increases to aeronautical operating costs include Terminal Realignment project ($5.2 million),
maintenance FTEs in support of aeronautical business ($2 million), Planning studies for terminal
development/FIS ($150K), Environmental work ($145K).
Increases to debt service is mainly driven by an increase in principal payment for 2005 bonds ($2.4
million aero), funding source for aero projects such as Runway 16L.
IV-22
Port of Seattle 2012 Preliminary Budget
Amortization of new aeronautical assets ($3.3 million) is driven by Runway 16C taxiway panel
($591K), HVAC air ducts ($222K), and allocation of IT/Roadways assets ($811K).
Non-Aeronautical Summary
2009 2010 2011 2011 2012 '12-'11 Bud Change
$ in 000's Actual Actual Budget Forecast Budget Var $ Var %
Revenues:
Public Parking $ 49,689 $ 49,416 $ 52,847 $ 51,542 $ 53,780 $ 933 1.8%
Customer Facility Charge (RCF) - - 1,543 500 9,053 7,510 486.6%
Rental Cars 33,320 30,309 32,290 31,678 26,580 (5,710) -17.7%
Concessions 33,473 33,765 32,640 34,366 34,924 2,283 7.0%
Ground Transportation 4,737 4,896 6,936 7,416 7,519 583 8.4%
Other 16,128 17,033 18,707 19,402 18,975 267 1.4%
Total Non-Airline Revenue 137,348 135,418 144,965 144,904 150,831 5,866 4.0%
RCF Operating Expense - - 1,546 1,546 8,150 6,604 427.1%
All Other Operating Expense 55,916 54,743 62,850 61,479 65,939 3,088 4.9%
Share of terminal O&M 17,011 16,935 17,940 17,467 18,912 972 5.4%
Less utility internal billing (16,738) (14,464) (18,370) (18,370) (19,789) (1,419) 7.7%
Net Operating & Maint 56,189 57,215 63,967 62,122 73,212 9,245 14.5%
Net Operating Income $ 81,159 $ 78,203 $ 80,997 $ 82,782 $ 77,619 $ (3,379) -4.2%
Highlights:
Customer Facility Charge increase to cover operating costs associated with Rental Ca r Facility and
related busing operations.
Rental cars revenues decreased in 2012 due to $900K reduction of MAG and $2 million credit
incentive.
Operating expense increased due to maintenance costs of $1M, B&O taxes $215K, Club International
$314K, and cor porate and divisional allocations of $2M.
2009 2010 2011 2011 2012 '12-'11 Bud Change
Actual Actual Budget Forecast Budget Var $ Var %
Enplanements (in 000s) 15,610 15,773 15,845 16,404 16,650 805 5.1%
Revenues / Enplanement
Public Parking 3.18 3.13 3.34 3.14 3.23 (0.11) -3.2%
Customer Facility Charge (RCF) 0.00 0.00 0.10 0.03 0.54 0.45 458.3%
Rental Car (net of CFCs) 2.13 1.92 2.04 1.93 1.60 (0.44) -21.7%
Concessions 2.14 2.14 2.06 2.09 2.10 0.04 1.8%
Ground Transportation 0.30 0.31 0.44 0.45 0.45 0.01 3.2%
Other 1.03 1.08 1.18 1.18 1.14 (0.04) -3.5%
Total Revenue 8.80 8.59 9.15 8.83 9.06 (0.09) -1.0%
Primary Concessions Sales / Enpl 9.66 9.99 10.12 10.24 10.42 0.30 3.0%
Gross Profit Margin 59.1% 57.7% 55.9% 57.1% 51.5% (0.04) -7.9%
IV-23
Port of Seattle 2012 Preliminary Budget
Highlights:
2009 and 2010 Concession revenues per enplanement would be $2.09 without tenant marketing
expenses of $623K and $807K, respectively. Tenant marketing expenses reside in a new cost center in
2011 and 2012.
Concessions 2011 forecast is higher than 2011 budget due to one-time revenues in 2011, such as
Google promotions.
Primary concessions sales are comprised of Food & Beverages and Retail & Duty Free revenues.
Concession revenues consist of food & beverages, retail & duty-free, advertisement, space rental, and
in-flight kitchen, and other smaller accounts.
Traffic
Passenger traffic measured by enplaned passengers is projected grow 1.5% in 2012 compared to the forecast
for 2011 (up 4.0%), for a total of 16,650 million enplanements. Through August 2011, total enplaned
passengers are up 4.5% compared to 2010. Thus, the 201 2 budget for enplaned passengers appears to be
conservative.
Landed weight is budgeted to grow at 1% for 2012 compared to the 2011 forecast.. Since passenger carriers
have been operating with exceptionally high load factors, growth in passenger levels will likely require
increased capacity and landed weight.
Sensitivity of Financial Results to Changes in Enplanements
Based on the assumptions in the 2012 budget, a 1.0% increase or decrease in enplaned passengers will
generate a change in non-aeronautical net operating income of $950K, and a change in debt service coverage
of 0.01x. There will also be a change in CPE of $0.13.
IV-24
Port of Seattle 2012 Preliminary Budget
Full-Time Equivalent Staff Positions (FTEs)
The 2012 budget proposes a net increase of 86.0 FTEs, or 12.7%. Of the 86.0 FTEs added, 59.0 FTEs are for
the Rental Car Facility and 27.0 FTEs are from the new requests driven by expense drivers mentioned from
above. Each new position has been previously presented through the discussion of expense drivers.
FTE's %
2011 Budget
Aviation 749.9
Rental Car Facility 12.0
761.9
2011 Budget Changes:
Aeronautical & Landside Ops 2.2
Aviation Services 3.9
Fire Department Funding from Safer Grant 3.0
Rental Car Facilitty - Maintenance 2.0
2011 Baseline 773.0
2012 Budget Changes:
Rental Car Facility (RCF) & Bus Maintenance Facility (BMF)
Bus Drivers 50.0
BMF Mechanics 5.0
BMF Utility Workers 4.0
RCF & BMF Subtotal 59.0
Other Aviation Division Initiatives
New Facilities & Assets 12.0
Safe & Secure Airport 3.0
Customer Needs & Capacity 1.0
Asset Management 5.0
Customer Service 2.0
Airline cost Management 2.0
Employee Development 1.0
Other New Initiatives 1.0
Other Initiatives Subtotal 27.0
2012 Budget Proposed FTEs 859.0 12.7%
IV-25
Port of Seattle 2012 Preliminary Budget
The table above shows the trends of FTEs for the Aviation division. The 2012 total FTEs is at a 2009 level
when 90.00 positions were eliminated.
IV-26
Port of Seattle 2012 Preliminary Budget
E. OPERATING BUDGET SUMMARY
TABLE IV-4: REVENUE BY ACCOUNT
($ in 000's) % Change
2010 2011 2012 2012 Bud-
Revenue by Account Notes Actual Budget Budget 2011 Bud
Operating Revenue
Equipment Rental $995 $792 $831 4.9%
Landing Fees 56,647 61,200 70,152 14.6%
Airport Transportation Fees 4,814 6,876 7,459 8.5%
Parking Revenue 52,336 55,936 56,884 1.7%
Revenue from Sale of Utilities 6,375 6,883 6,175 -10.3%
Property Rental Revenue 200,722 209,078 211,018 0.9%
Other Revenues 20,284 29,752 34,445 15.8%
Fuel Hydrant non-cash reclass to non-operating 1 (7,912) (7,839) 0 -100.0%
Total Operating Revenue $334,262 $362,678 $386,964 6.7%
avbud.xls
FIGURE IV-3: AVIATION DIVISION REVENUE BY ACCOUNT
($ in 000's)
Equipment Rental
0.2%
Other Revenues
8.9% Landing Fees
18.1% Airport Transportation Fees
1.9%
Parking Revenue
14.7%
Property Rental Revenue
54.5%
Revenue from Sale of
Utilities
1.6%
Total Revenue: $386,964
IV-27
Port of Seattle 2012 Preliminary Budget
TABLE IV-5: OPERATING & MAINTANENCE EXPENSES BY ACCOUNT
(in 000's) % Change
2010 2011 2012 2012 Bud-
Expense by Account Actual Budget Budget 2011 Bud
Salaries, Wages, Benefits & Worker's Comp $76,036 $81,673 $93,764 14.8%
Equipment Expense 3,347 3,776 2,471 -34.6%
Utilities 11,381 12,576 12,458 -0.9%
Supplies & Stock 4,692 4,100 4,425 7.9%
Outside Services 22,519 29,453 37,404 27.0%
Travel & Other Employee Expenses 755 1,429 1,551 8.5%
Promotional Expenses 668 597 726 21.7%
Other Expenses 6,695 6,965 8,194 17.6%
Total O&M without Environmental 126,092 140,568 160,993 14.5%
Environmental Remediation Liability 3,271 1,771 3,096 74.8%
Total O&M with Environmental 129,363 142,339 164,090 15.3%
Charges to Capital Projects (2,881) (2,765) (3,239) 17.2%
Total Budgeted Operating Expense 126,481 139,575 160,851 15.2%
avbud.xls
FIGURE IV-4: AVIATION DIVISION EXPENSE BY ACCOUNT
($ in 000's)
Other Expenses Environmental
Promotional Expenses 5.0% Remediation Liability
0.4% 1.9%
Travel & Other Employee
Expenses
0.9%
Outside Services
22.8% Salaries, Wages, Benefits &
Worker's Comp
57.1%
Utilities
7.6%
Supplies &
Stock
2.7%
Equipment Expense
1.5%
Total Before Charges to Capital Projects: $164,090
Charges to Capital Projects: $3,239
Total Expense: $160,851
IV-28
Port of Seattle 2012 Preliminary Budget
TABLE IV-6: REVENUE AND EXPENSE BY BUSINESS GROUP/DEPARTMENT
AVIATION DIVISION % Change
(in 000's) 2010 2011 2012 2012 Bud -
Notes Actual Budget Budget 2011 Bud
OPERATING REVENUES
AIRLINE REVENUES
Landing Fees 56,647 61,200 70,152 14.6%
Terminal Rents 126,459 141,285 150,270 6.4%
Other Airline Revenues 15,223 14,715 15,197 3.3%
Total Airline Revenues 198,329 217,200 235,619 8.5%
NON-AIRLINE REVENUES
Public Parking 49,440 52,847 53,780 1.8%
Rental Cars 30,309 33,833 35,633 5.3%
Employee Parking 5,211 5,301 5,211 -1.7%
Ground Transportation 4,896 6,936 7,519 8.4%
Commercial Properties 4,908 4,765 4,972 4.3%
Concessions 32,960 32,640 34,924 7.0%
Utilities 6,403 7,464 6,803 -8.9%
Other 1 1,293 1,177 1,989 69.1%
Total Non-Airline Revenues 135,419 144,965 150,831 4.0%
Fuel Hydrant Facilities Revenue 8,426 8,353 514 -93.8%
Fuel Hydrant non-cash reclass to non-operating revenues 2 (7,912) (7,839) - -100.0%
Total Operating Revenues 334,262 362,678 386,964 6.7%
BDAVREEX.xls
Notes:
1) Include new lounge revenue offset by costs in 2010.
2) Fuel Hydrant non-cash reclass to non-operating revenues based on Accounting change.
IV-29
Port of Seattle 2012 Preliminary Budget
AVIATION DIVISION (in 000's) 2010 2011 2012 % Change
2012 Bud -
Notes Actual Budget Budget 2011 Bud
EXPENSES BEFORE CHARGES TO CAPITAL PROJECTS
BUSINESS UNITS
Airport Operations 32,212 36,832 49,539 34.5%
Business Dev & Management 3,646 4,272 5,464 27.9%
Utilities 13,698 15,322 12,923 -15.7%
Business Units 49,556 56,427 67,926 20.4%
AVIATION SERVICES
Aviation Director's Office 1 1,492 1,931 2,304 19.3%
Division Contingency - 2,110 2,087 -1.1%
Fire Department 11,184 11,980 11,926 -0.4%
Aviation Planning 994 2,373 1,898 -20.0%
Aviation Finance & Budget 690 762 864 13.5%
Community Development 1,809 1,909 1,590 -16.7%
AV Environmental Programs Group 3,397 3,827 3,939 2.9%
Airport Security 5,647 6,044 6,136 1.5%
Aviation Services 25,213 30,935 30,744 -0.6%
AVIATION FACILITIES
AV Facilities & Infrastructure 1,889 2,088 2,334 11.8%
Aviation Signage 356 500 458 -8.4%
Airport Building Department 799 736 689 -6.4%
Airport Office Building 2 971 1,093 1,210 10.7%
Aviation Maintenance 47,067 48,791 55,837 14.4%
Aviation Facilities 51,081 53,207 60,527 13.8%
Aviation Risks Expense - - 1,796
Aviation Environmental Remediation Liability 3,271 1,771 3,096 74.8%
Aviation Capital to Expense 241 - - n/a
Total Expenses Before Charges to Capital Projects 129,362 142,339 164,090 15.3%
CHARGES TO CAPITAL PROJECTS (2,881) (2,765) (3,239) 17.2%
OPERATING & MAINTENANCE EXPENSE
BUSINESS UNITS
Airport Operations 31,726 35,864 48,368 34.9%
Business Dev & Mgmt 3,431 4,272 5,464 27.9%
Utilities 13,668 15,322 12,923 -15.7%
Business Units 48,825 55,459 66,755 20.4%
AVIATION SERVICES
Aviation Director's Office 1,150 1,431 1,804 26.1%
Division Contingency - 2,110 2,087 -1.1%
Fire Department 11,143 11,799 11,749 -0.4%
Aviation Planning 991 2,373 1,898 -20.0%
Aviation Finance & Budget 690 762 864 13.5%
Community Development 1,760 1,835 1,499 -18.3%
Airport Security 5,636 6,044 6,136 1.5%
Aviation Risks Expense - - 1,796
Aviation Services 21,369 26,353 27,833 5.6%
AVIATION FACILITIES
AV Facilities & Infrastructure 1,524 1,654 1,884 13.9%
Aviation Signage 353 500 458 -8.4%
Airport Building Department 113 363 389 7.3%
Airport Office Building 3 956 1,093 1,210 10.7%
AV Environmental Programs Group 3,244 3,705 3,847 3.8%
Aviation Maintenance 46,636 48,678 55,379 13.8%
Aviation Facilities 52,827 55,992 63,166 12.8%
Aviation Operating & Maintenance Expense 123,021 137,804 157,754 14.5%
Aviation Environmental Remediation Liability 4 3,271 1,771 3,096 0.0%
Aviation Capital to Expense 189 - - 0.0%
Total Operating Expense 126,481 139,575 160,851 15.2%
BDAVREEX.xls
Notes:
1) Chief Technology Officer transfers from Corporate.
2) Airport Building department has more expense work projects versus capital projects.
3) Airport building janitorial cost transferred from Operations and more work on expense versus capital projects.
4) Environmental remediation expense driven by capital projects for vertical conveyance,
common use expansion, south satellite concessions, and GSE electrical charge stations.
IV-30
Port of Seattle 2012 Preliminary Budget
F. STAFFING
Table IV-7 outlines the full-time equivalents (FTEs) adjusted for temporary positions, interns and other limited
duration employees for the Aviation division. Aviation is budgeting 859.0, which is 12.7 percent higher than
2011 budget. See previous discussion of FTE changes in the 2012 Budget.
TABLE IV-7: AVIATION DIVISION STAFFING
STAFFING
(Full-Time Equivalent Positions) % Change
2010 2011 2011 2012 2012 Bud -
BUSINESS GROUP/DEPARTMENT Notes Actual Budget Est. Act. Budget 2011 Bud
AIRPORT OPERATIONS
Aeronautical Business Group 105.7 109.0 108.0 110.0 1.0%
Landside Business Group 1 72.3 83.3 86.5 136.5 63.9%
Airport Operations 178.0 192.3 194.5 246.5 28.2%
BUSINESS DEVELOPMENT
Aviation Properties 2 9.0 9.0 9.0 9.5 5.6%
Concession 5.0 6.0 6.0 6.0 0.0%
Business Development 2 3.0 3.0 3.0 3.3 8.3%
Business Management 1.0 2.0 2.0 2.0 0.0%
Acquisition 4.0 0.0 0.0 0.0 n/a
Utilities 3 0.0 0.0 0.0 1.0 n/a
Business Development 22.0 20.0 20.0 21.8 8.7%
AVIATION SERVICES
Airport Director's Office 4 8.5 8.5 10.1 10.1 19.8%
Fire Department 5 73.0 73.0 76.0 76.0 4.1%
Planning 9.0 9.0 9.0 9.0 0.0%
Aviation Finance & Budget 5.0 6.0 6.0 6.0 0.0%
Community Development 9.0 9.0 10.0 10.0 11.0%
Airport Security 72.8 71.8 73.0 73.0 1.7%
Total Aviation Services 177.2 177.3 184.1 184.1 3.9%
FACILITIES
Facilities & Infrastructure 6 14.0 14.0 14.0 15.0 7.1%
AV Signage 7 3.0 3.0 3.0 4.0 33.3%
Airport Building Department 5.0 5.0 5.0 5.0 0.0%
Airport Office Building 6.0 6.0 6.0 6.0 0.0%
Environmental 16.2 15.4 15.4 15.7 1.6%
Maintenance 8 325.0 329.0 331.0 361.0 9.7%
Total Facilities 369.2 372.4 374.4 406.7 9.2%
TOTAL AVIATION DIVISION 746.4 761.9 773.0 859.0 12.7%
FTE.XLS
Notes:
1) 2012 Budget includes hiring of 50 FTEs for the Rental Car Facility.
2) 2012 Budget includes 0.8 FTEs Graduate Interns.
3) 2012 Budget includes hiring a new Senior Energy Conservation Engineer FTE.
4) 2011 Est. Actual includes a transfer of Chief Technology Officer from Corporate.
5) 2011 Est. Actual includes 3 Firemen due to SAFER grant funding.
6) 2012 Budget includes an Energy Conservation FTE.
7) 2012 Budget includes a Sign Writer.
8) 2012 Budget includes 11 FTEs for the Rental Car Facility, and 21 FTEs for mainaining the airport terminal
and airfield.
IV-31
Port of Seattle 2012 Preliminary Budget
G. CAPITAL BUDGET
The business plan summaries at the beginning of this section provide the context for the following capital
budget for the Aviation Division.
Table IV-8 provides a Summary of the Aviation Approved Capital Budget for 2012.
TABLE IV-8: AVIATION CAPITAL BUDGET SUMMARY
($ in 000's) 2012 2012-2016 % of 2012 Total
Budget CIP Committed
Committed Capital Projects
Airfield $49,387 $126,899 17.8%
Business Development 4,570 7,070 1.7%
Landside 72,273 72,273 26.1%
Air Terminal 80,694 116,789 29.1%
Infrastructure 34,967 53,424 12.6%
Stormwater 2,752 3,637 1.0%
Airfield Security 2,062 2,062 0.7%
Aviation NOISE 15,155 40,438 5.5%
Division-wide Projects 15,066 21,131 5.4%
Total Committed $276,926 $443,723 100.0%
Business Plan Prospective Projects $69,908 $650,775
Total CIP $346,834 $1,094,498
capsum.xls
FIGURE IV-5: AVIATION DIVISION COMMITTED CAPITAL BUDGET
($ in 000's)
Aviation NOISE
Airfield Security 5.5% Division-wide Projects
0.7% 5.4%
Stormwater
1.0% Airfield
Business Development
17.8%
Infrastructure 1.7%
12.6%
Landside
Air Terminal 26.1%
29.1%
Committed CIP Total Spending: $276,926
IV-32
Port of Seattle 2012 Preliminary Budget
H. AVIATION DIVISION OPERATING STATISTICS
TABLE IV-9: AVIATION DIVISION OPERATING STATISTICS
(1) (2) (3)
Enplaned Total
Passengers Landed Weight Air Cargo
Year Number Growth Pounds Growth Metric tons Growth
1998 12,868 22.9% 21,342 15.4% 428,327 4.4%
1999 13,802 7.3% 23,078 8.1% 444,224 3.7%
2000 14,174 2.7% 23,051 -0.12% 456,920 2.9%
2001 13,506 -4.7% 22,178 -3.8% 401,535 -12.1%
2002 13,362 -1.1% 21,658 -2.3% 374,753 -6.7%
2003 13,356 0.0% 20,790 -4.01% 351,418 -6.2%
2004 14,364 7.6% 20,944 0.7% 347,517 -1.1%
2005 14,632 1.9% 20,186 -3.6% 338,591 -2.6%
2006 14,982 2.4% 20,362 0.9% 341,981 1.0%
2007 15,661 4.5% 21,014 3.2% 319,013 -6.7%
2008 16,085 2.7% 21,519 2.4% 290,205 -9.0%
2009 15,610 -3.0% 20,388 -5.3% 270,142 -6.9%
2010 15,773 1.0% 19,786 -3.0% 283,425 4.9%
2011 Budget 15,845 0.5% 20,089 1.5% 296,400 4.6%
2011 Forecast 16,404 4.0% 20,241 2.3% 283,425 0.0%
2012 Budget 16,650 1.5% 20,444 1.0% 289,094 2.0%
Compound Growth
2000 - 2010 1.1% -1.5% -4.7%
2005 - 2010 1.5% -0.4% -3.5%
Notes:
1) Passengers in thousands
2) Weight in thousands
3) In Metric Tons
AVSTAT.XLS
IV-33
Port of Seattle 2012 Preliminary Budget
SEAPORT DIVISION
A. 2012 BUDGET SUMMARY
TABLE V-1: 2012 CASH FLOW SUMMARY
Percent
($ in 000s) 2012 of Total
SOURCES OF CASH
Operating Revenues $ 96,424 64.2%
Interest Receipts 1,306 0.9%
Proceeds from Bond Issues - 0.0%
Grants and Capital Contributions 2,466 1.6%
Tax Levy 49,320 32.9%
Other Receipts 579 0.4%
Total 150,095 100%
USES OF CASH
Expenses from Operations:
Operating & Maintenance Expense 29,078 18.5%
Corporate Administrative Expense 17,458 11.1%
Law Enforcement Costs - 0.0%
Environmental Expenditures - 0.0%
Total Operating Expenses 46,536 29.6%
Debt Service:
Interest Payments 24,972 15.9%
Bond Redemptions 42,233 26.9%
Total Debt Service 67,205 42.7%
Other Expenses 7,947 5.1%
Public Expense 5,004 3.2%
Capital Expenditures 30,574 19.4%
Total $ 157,265 100%
Cashflw.xls SP
Note: We built-up a significant cash balance in the past few years due to economic uncertainty, and we
are planning to draw down the cash balance in 2012.
V-1
Port of Seattle 2012 Preliminary Budget
FIGURE V-1: SOURCES OF CASH
($ in 000's)
Other Receipts
0.4%
Tax Levy
32.9%
Operating Revenues
64.2%
Grants and Capital
Contributions
1.6%
Total Sources: $150,095
Interest Receipts
0.9%
FIGURE V-2: USES OF CASH
($ in 000's)
Public Expense
3.2% Capital Operating &
Expenditures Maintenance
19.4% Expense
18.5% Corporate
Other Administrative
Expenses Expense
5.1% 11.1%
Bond Interest Payments
Redemptions 15.9%
26.9%
Total Uses: $157,265
V-2
Port of Seattle 2012 Preliminary Budget
B. BUSINESS PLAN FORECAST
TABLE V-2: BUSINESS PLAN FORECAST
($ in 000's) Compound
Budget Budget Forecast Growth
OPERATING BUDGET Notes 2011 2012 2013 2014 2015 2016 2011-2016
Operating Revenue $ 98,387 $ 98,579 $ 101,124 $ 110,304 $ 110,909 $ 110,625 2.4%
Total Operating Revenues 98,387 98,579 101,124 110,304 110,909 110,625 2.4%
Operating & Maintenance Expense 30,542 29,078 30,253 25,824 28,293 28,818 -1.2%
Corporate & Capital Development Division Costs 1 16,565 17,458 18,331 19,248 20,210 21,221 5.1%
Total Operating & Maintenance Expenses 47,108 46,536 48,584 45,072 48,503 50,038 1.2%
Net Operating Income Before Depreciation 51,280 52,043 52,540 65,232 62,406 60,587 3.4%
Total Depreciation Expense 31,898 31,713
Net Operating Income After Depreciation $ 19,381 $ 20,330 Total
2012-2016
Committed Capital Budget $ 29,490 $ 25,706 $ 5,480 $ 3,533 $ 3,525 $ 3,500 $ 41,744
Business Plan Prospective 12,005 4,868 43,970 56,280 72,600 76,678 254,396
TOTAL CAPITAL BUDGET 2 $ 41,495 $ 30,574 $ 49,450 $ 59,813 $ 76,125 $ 80,178 $ 296,140
mabpfor.xls
Notes:
1) Consists of remaining Corporate & Capital Development costs to be allocated to Business Groups after direct charges have been
coded to groups and Divisions or other costs allocated to Divisions. Most costs are allocated using a formula based on Expenses
and employees. For some departments specific allocation methodologies, such as employees for Human Resources & Development,
are used.
2) See Section X for details of Capital Budget.
C. DIVISION MISSION STATEMENT
Our mission is to:
Efficiently manage our assets for the benefit of the public and generate sufficient net operating
income to be financially self sustaining;
Provide services and facilities for the transportation of cargo and passengers;
Accommodate the region's fishing industries;
Promote the economic health of our community.
INTRODUCTION
The Seaport includes two major business groups: Lease & Asset Management and Cruise & Maritime
Operations. There are also service groups within the Seaport Division including Commercial Strategy,
Environmental Services & Planning, and Finance. These businesses and service groups oversee the marketing,
strategic development, and management of cargo and cruise terminals, moorage facilities, and other industrial
properties connected to these businesses.
Seaport facilities encompass approximately 1,200 acres of moorage and cargo-related facilities. Over 500
acres are dedicated to container operations at four terminals with over12,300 feet of container berth space
and 24 cargo cranesincluding seven Super Post-Panamax cranes. The Seaport also owns a fully automated
grain terminal and general purpose maritime facilities. It is home to the North Pacific factory trawler fishing
fleet. The Seaport also operates two cruise vessel terminals with a total of three berths. In addition, the Seaport
leases industrial property connected with these cruise, cargo, and factory trawler fishing businesses.
V-3
Port of Seattle 2012 Preliminary Budget
D. 2012 BUSINESS PLAN
BUSINESS STRATEGY
Economic Benefits and Financial Sustainability:
While the Seaport is a public agency with a mission to accomplish public goals rather than to make profits, it
must operate like a business, relying on revenues from our customer base for most of its net operating income.
It is a strong financial bottom line that allows the Seaport to invest in projects that benefit the entire
community, both economically and environmentally.
We create economic benefits for the entire region through our business activities. Each vessel docked in
Seattle, each container and passenger that passes through our Port and each of our tenants creates jobs and
brings business income and tax dollars to the region and the state. The most critical measure of the Seaport's
financial sustainability is a growing, positive Net Operating Income (NOI). Only with strong financial
performance, can the Seaport provide the economic, community and environmental benefits that are the
essence of its mission.
Environmental Benefits:
The Seaport is a steward of the environment: We improve the environmental condition of our property through
our redevelopment and capital projects, provide new and/or improved public open spaces, and take steps to
reduce air pollution, conserve energy and water, and recycle to reduce the amount of garbage we produce. In
2007 the Port adopted the goal of becoming the greenest, cleanest most energy efficient port in the United
States.
Community Benefits and Social Responsibility
The Port of Seattle as a major economic engine within the region purchases significant materials from local
vendors and contracts with hundreds of firms for construction and maintenance-related activities. One aspect
of community benefit and social responsibility is adopting policies and programs to insure that much of this
work goes to local small businesses and the communities within which those businesses are located and live.
In 2007, the Port created an Office of Social Responsibility to guide this effort.
In 2011, the Seaport's three Strategic Initiative Teams developed long term Seaport Strategies;
Commercial Business
Asset Stewardship
Green Gateway
For 2012, the Seaport will advance these strategies in alignment with the commission's Century Agenda and
key Corporate initiatives including implementation of SharePoint and metrics.
For 2012, the critical work needed to advance these strategies is:
Retain and attract customers to our gateway
Facilitate efforts to assure freight mobility during road project construction
Complete high priority capital and major expense projects
Perform key asset condition assessments
Develop environmental initiatives to enhance the Port's economic competitiveness
PARTNERSHIPS
We would not be able to fulfill our mission without positive relationships with our partners. We are focused
on:
Meeting the needs of our customers by:
Maintaining regular contact with our key customers to stay in touch with their needs and identify
opportunities to increase business through port facilities;
V-4
Port of Seattle 2012 Preliminary Budget
Working with stakeholders to constantly improve freight mobility within the seaport;
Facilitating customer relationships with federal inspection agencies;
Developing new business opportunities for our customers; and
Providing market information to support our tenants' interest in expansion.
Approaching our relationship with labor honestly and with integrity, communicating effectively, and
working together under a fair labor agreement.
Respecting tribal sovereignty, and tribal religious and cultural values in all consultations with our
tribal neighbors.
V-5
Port of Seattle 2012 Preliminary Budget
EXECUTIVE SUMMARY: 2012 SEAPORT STRATEGIES
WE WILL HAVE ENSURED THE VITALITY OF THE SEAPORT BY:
Achieving our financial objectives:
$52.0 Million Net Operating Income (NOI) reached by 12/31/2012. In 2012, each business unit will
contribute to the total Seaport NOI as budgeted:
Lease & Asset Management NOI = $48.8 Million
Cruise & Maritime Operations NOI = $3.2 Million
Environmental Remediation Liabilities = $0.0 Million
Providing compelling value that will attract and retain customers, and which will further the Port's
financial objectives by:
Reaching long term agreements with cruise lines that currently utilize Pier 66 as a homeport
Determine feasibility and investment priority for installation of shore power at Pier 66 Bell Street
Pier Cruise Terminal
Meeting key milestones in our capital plan
Preserving our assets and increasing their utilization by:
Conducting condition assessments and/or repairs of our critical capital assets including dock
structures, underwater slopes, and water depth
Ensure accountabilities for grain terminal improvements are identified and implemented
WE WILL HAVE DEVELOPED NEW BUSINESS AND ECONOMIC OPPORTUNITIES FOR
THE REGION AND THE PORT BY:
Generate revenue from Terminal 25 South
Jointly marketing the Port of Seattle with our container terminal tenants and the railroads
Actively promoting our Foreign Trade Zone (FTZ)
Increased focus on and promotion of regional exports
Leveraging our Green Gateway brand to increase awareness of business friendly environmental
initiatives and attract cargo to our gateway
Leading the U.S. West Coast Collaboration (USWCC) effort to highlight West Coast advantages to
shippers
Market mid-week and shoulder season cruise itineraries
Seek out new and/or additional business in commercial vessel moorage for T91
WE WILL HAVE ENHANCED PUBLIC UNDERSTANDING AND SUPPORT OF THE PORT'S
ROLE IN THE REGION BY:
Seeking speaking engagements in the community
Striving to purchase at least 15% of all goods and services from qualified small businesses
WE WILL HAVE BEEN A CATALYST FOR REGIONAL TRANSPORTATION SOLUTIONS BY:
Ensuring that construction and design of the Alaskan Way Viaduct replacement does not adversely
affect operations and drive business to other ports
Ensuring implementation of the construction mitigation action plan for multiple construction
projects in the Duwamish Maritime Industrial area
V-6
Port of Seattle 2012 Preliminary Budget
WE WILL HAVE BEEN A LEADER IN TRANSPORTATION SECURITY BY:
Meeting Federal mandates for security measures, training, and training exercises
Research and identify potential technologies to improve efficiency of operations at Seaport and
tenant facilities
Collaborate with Aviation Division to develop and implement comprehensive Emergency
Preparedness Program Port-wide.
WE WILL HAVE EXHIBITED ENVIRONMENTAL STEWARDSHIP THROUGH OUR ACTIONS
BY:
Achieving/maintaining zero regulatory violations
Continue implementation of the Northwest Ports Clean Air Strategy (NWPCAS) with our tenants,
customers, business partners and the Puget Sound Clean Air Agency. Work with our partner Ports
and others to update the NWPCAS strategy to include longer term goals (2020) and to continue to
reduce air emissions. Publishing the 2011 update of Puget Sound Maritime Air Emissions Inventory
Continued succesful implementation of the Green Gateway Partners program
Building and improving stormwater systems and meeting stormwater management plan
requirements
Making significant progress on investigation and cleanup of key contamination sites, including the
Lower Duwamish, East Waterway, Terminal 91, and Terminal 117
WE WILL HAVE BEEN A HIGH PERFORMANCE WORKPLACE BY:
Successful transition of Seaport departments to use of the SharePoint collaboration and document
management system
Providing our staff with regular feedback on individual and team performance along with the
support and guidance they need to be successful
Completing PREP plans with training, development, and diversity components
Achieving a perfect safety score and zero accidents by providing our staff with the necessary tools
and training
V-7
Port of Seattle 2012 Preliminary Budget
SEAPORT LEASE & ASSET MANAGEMENT
MISSION
Negotiate and manage Seaport leases and manage assets to support the Port's overall goals and maintain a
sustainable Seaport.
DESCRIPTION
The major leases managed by this group include the container terminals at Terminal 5, Terminal 18, Terminal
30, Terminal 46 and Terminal 115; the grain facility at Terminal 86; and leases to support the fishing industry
primarily at Terminal 91. The group also manages other industrial leases that support Seaport terminals and
operations.
Besides lease management, this team is also developing and will maintain an asset management system to
track condition and projected investments in all Seaport assets. This team also coordinates Seaport traffic
issues and cooperates with regional transportation planning.
BUSINESS STRATEGY
Lease Management: Manage and lease the container terminals portfolio and enhance the value of the
managed assets by increasing revenue and reducing expenses.
By effectively focusing on our customers, we can better understand how to meet their needs in a competitive
and cost effective manner. Activities such as gathering and disseminating market, industry and community
information, communicating with both customers and influencers, investing in future infrastructure, and
conducting industry forums all serve to support shipping operations in the PNW.
As cargo volumes grow, we are also focused on trying to manage the impacts from that growth and anticipate
future issues to allow for efficient growth to continue. As we move into the future, continued focus on
technology issues at the terminals will help our port continue to be efficient.
Asset Management: Through a number of major capital projects, the Seaport has enhanced its assets over the
years. Now the focus is to develop and maintain a more comprehensive program of managing for the long
term sustainability of the asset portfolio to the benefit of the Port mission and goals.
We partner with our customers to ensure that their facilities, which are Port assets, are properly maintained to
both preserve their value and help our customers to maximize their cargo throughput. We will focus on
providing customer value through building and maintaining relationships with our key customers, and striving
to understand and anticipate their needs.
V-8
Port of Seattle 2012 Preliminary Budget
KEY GOALS AND MEASURES
Key Goals Major Tasks Measure Targets
Goal 1: Asset Stewardship Program
Enhance management of key
port container assets by both Develop comprehensive asset Complete second phase of
port and tenants. management plan initial review of asset base Q4
Complete dock structural
surveys Survey remaining docks Q4
Complete Pier 91 Building 175
Roof Replacement Construction complete Q2
Ensure grain terminal
improvements are Accountabilities identified and
accomplished implemented Q4
Replace ZPMC crane
gearboxes at T46 Replacement complete Q4
Inspect terminals for tenant
compliance Complete inspections Q4
Complete test repair section of
T18 pile caps Construction complete Q2
Goal 2: Green Port Initiatives
Support Port's green port Facilitate a comprehensive
strategy through specific green construction traffic
initiatives. management approach among
City and State projects that
maintains the functionality of
the Port's drayage routes
through:
a. Regular participation in
MOT meetings;
b. Review of and comments
on traffic control plans;
c. Field assessments,
d. Check-ins with Port Partner staff integrates
stakeholders; and comments into planning efforts
e. Communication of issues to the extent possible. Q1
Implement RFID for truck
program Implementation complete Q1
Determine options for
reducing Port related truck
queues in the Spokane Street
corridor Options identified Q3
V-9
Port of Seattle 2012 Preliminary Budget
Key Goals Major Tasks Measure Targets
Goal 3: Commercial Strategy
Maintain and enhance
revenues and Net Operating
Income by controlling costs,
maintaining existing customers Seek revenue opportunities for
and leasing vacant properties T25 South Revenue generated Q4
Work with Commercial
Strategy and Cruise staff to
communicate construction
related traffic impacts to Port
stakeholders via:
a. Written materials Port stakeholders report that
b. Regular meetings they get the information they
c. Ad-hoc briefings need Q4
Complete street vacation
process and property transfers
Complete Terminal 5 Q4
related to past expansion
projects Complete Terminal 30 Q4
TABLE V-3: LEASE & ASSET MANAGEMENT BUSINESS PLAN FORECAST
($ in 000's) Compound
Budget Budget Forecast Growth
OPERATING BUDGET Notes 2011 2012 2013 2014 2015 2016 2011-2016
Operating Revenue $ 81,622 $ 81,310 $ 85,375 $ 93,893 $ 93,812 $ 93,237 2.7%
Operating & Maintenance Expense 19,577 19,533 22,261 17,973 20,242 20,615 1.0%
Corporate Administrative Expense 1 12,433 13,001 13,651 14,334 15,051 15,803 4.9%
Total Operating Expense 32,009 32,534 35,912 32,307 35,293 36,418 2.6%
Net Operating Income Before Depreciation 49,613 48,776 49,463 61,586 58,519 56,819 2.7%
Total Depreciation Expense 23,035 22,672
Net Operating Income After Depreciation $ 26,577 $ 26,103
Total
2012-2016
COMMITTED CAPITAL BUDGET 2 $ 20,596 $ 19,981 $ 3,190 $ 1,400 $ - $ - $ 24,571
mabpfor.xls
Notes:
1) Consists of remaining Corporate costs to be allocated to Business Groups after direct charges have been coded to Groups
and Divisions or other costs allocated to Divisions. Most costs are allocated using a formula based on Expenses and
employees. For some departments specific allocation methodologies, such as employees for Human Resources & Development,
are used.
2) See Section X for details of Capital Budget - does not include business plan prospective projects.
V-10
Port of Seattle 2012 Preliminary Budget
CRUISE & MARITIME OPERATIONS
MISSION
Provide safe, secure and efficient cruise ship terminals and cargo handling maritime facilities which include
large vessel berthing docks for moorage, working apron areas and related equipment, cruise passenger
terminals, utilities and services to encourage current and new customers to move greater amounts of marine
tonnage and cruise passengers through the Port of Seattle. Market and provide cruise ship services and
facilities that maintain and grow the cruise business in the Seattle area. These facilities and services will
enhance the economy of the region, protect jobs and provide a reasonable rate of return to the Port of Seattle
and the citizens of King County.
DESCRIPTION
Cruise & Maritime Operations is made up of multiple deep water commercial moorage facilities in and around
the harbor with over 17,000 lineal feet of large vessel berth moorage and two cruise passenger terminals.
Maritime Facilities include: T91 piers 90 and 91, T46 North; plus vessel berths at P2, P17, 18N, P25, P28,
P34, P69, and other maritime facilities. The two cruise terminals include a single cruise vessel berth facility at
Pier 66, the Bell Street Pier Cruise Terminal, and a two berth facility at Terminal 91, the Smith Cove Cruise
Terminal.
Customers include cruise lines, Cruise Terminals of America, charter and excursion vessels, tug and barge
companies, large fishing and commercial vessels, the United States Navy and other ships of state. Industry
sectors served include cruise, marine transportation, staging and transport, the commercial seafood industry,
bunker and distillate fuels, and tug and barge services.
BUSINESS STRATEGY
Cruise: For the cruise business, our strategy is to market Seattle as a homeport and a port of call to cruise lines
serving Alaska and the Pacific Northwest. Through this, we will maintain our market share, increase cruise
passenger volumes and annual ship calls. We also create value for our customers by making our cruise
terminals efficient and cost effective; working with the Airport and logistic providers to improve the
operations and passenger experience at the Seaport and Airport; and working with the tourism and business
community so that we maximize economic impact from visiting passengers and cruise ships.
Maritime/Dock Operations: For our docks/commercial moorage facilities, we work with the terminal
operators, tugboat, fishing industry, and other dock users to maximize the use of vessel berthing and dock
facilities providing net income to the port. We focus on providing customer value through building and
maintaining relationships with our key customers, and continually strive to better understand and anticipate
their business needs. Retaining our current customers across all maritime sectors continues to be a key focus.
We also invest in strategic capital improvements to maintain and improve facilities, accommodate current
customers' needs, attract new business, and enhance revenue opportunities from our facilities.
Focus for the coming year will be on retaining customers and growing core business, asset stewardshipperforming
condition surveys and annual maintenance procedures, advancing capital improvement programs,
completing projects underway and expanding our green gateway strategy. This will include continued pursuit
of establishing cruise ship shore power facilities at P66, expanding recycling program at T91, indentifying
storm water improvements needed at T91 along with seeking energy efficiencies and reducing operating costs
through use of new technology in energy efficient yard lighting and security equipment.
Security: The focus for security will be to maintain compliance with regulations and policy and to enhance
business through identifying potential security technologies to improve the efficiency of operations and to
minimize costs through the effective use of available grants. A priority focus for 2012 will be on further
resolving the issue of discovered old munitions at T91 through the Formerly Used Defense Sites (FUDS)
program. This will require continued close coordination and support of the survey and cleanup work being
done by the U.S. Army Corps of Engineers in collaboration with Port of Seattle Police Department, U.S. Coast
V-11
Port of Seattle 2012 Preliminary Budget
Guard, Environmental Protection Agency and the U.S. Navy. Additional priority for 2012 will be staff
training in security and emergency preparedness related to both the Seaport reorganization and results from
Federal Emergency Management Agency (FEMA) exercise. This will be accomplished through close
collaboration with Airport Division.
KEY GOALS AND MEASURES
Key Goals Major Tasks Measure Targets
Commercial Strategy
Enhance regional economic
development by increasing
utilization of Port related
facilities and volume of cruise
passengers moving through the
Port's terminals resulting in Seek additional long term Cruise line commitment made
improvement of the Seaport's agreements with other existing beyond yearly berth request
Net Operating Income homeport cruise lines multiyear agreement Q4
Develop potential short NW Marketing package complete.
cruise itineraries (3 and 4 day). Shared investment model with
Work with other NW and BC other stakeholders in place for
ports on potential interporting joint marketing effort.
concept. Market concept Presentations made to cruise
proposals to cruise lines. line executives and itinerary
planners for consideration Q4
Develop a revenue sharing New agreement in place
cost model for secondary use between Seaport and Real
of cruise facilities. Estate Divisions balancing cost
and benefit gained from
revenue generated through use
of Seaport facilities. Q2
Reduce costs and increase Opportunities identified and
efficiencies in cruise changes made in operations to
operations and Port operations. increase efficiencies and
reduce cost. Q1-Q4
Enhance marketing efforts to Marketing plan developed and
gain additional business in executed for commercial
commercial vessel moorage at docks. Dock and moorage
T91, P69, and T18 North facility utilization increases.
mooring dolphins New vessel types using
commercial moorage facilities Q1-Q4
Monitor emerging markets for New business activity for port
opportunities to increase non- operated facilities identified
container cargos. Explore new and established.
business model of 3rd party
3rd party stevedoring and joint Q4
stevedoring and joint
marketing pilot program in
marketing.
place.
V-12
Port of Seattle 2012 Preliminary Budget
Key Goals Major Tasks Measure Targets
Customer marketing call to
cruise lines in seeking
additional Homeport and Port New business secured for
of Calls. future years. Q4
Asset Stewardship
Understand existing assets,
perform proper maintenance
Phase 2 of Pier 91 cruise
on current assets and align
berths fender system upgrades
asset investment to support Fender system upgrades at complete before start of 2012
long term market demand. Smith Cove Cruise Terminal cruise season. Q2
Perform all scheduled Required maintenance
maintenance at Port operated performed within schedule and
facilities budget Q1-Q4
Complete all other 2012 Completion
capital projects consistent with Design, permits, construction targets as
Final Approved Capital completed per approved defined in
Budget and commission capital plan and commission project
direction actions for 2012 schedules
Green Gateway/Environmental
Maintain compliance with all
local, state, and federal
regulations.
Collaborate with industry to
reduce environmental impacts.
Engage stakeholders and
community to build Continue to pursue shore Commission support received
understanding and support. power at Pier 66 cruise vessel for investment in Pier 66 shore
berth. power. Q2
Seek commitment from Partnership/possible shared
homeport cruise line served at investment with cruise line
Pier 66 to invest and utilize included as part of potential
shore power long term berthing agreement
at Pier 66. Q1-Q4
Collaborate with Seattle City
Light in seeking funding
opportunities for Pier 66 shore
power investment. Q1-Q4
Support Seaport Green 2012 program in place by start
Gateway Partner program. of cruise season. Increased
participation in program by
cruise lines and other ocean
going vessels. Q1-Q4
V-13
Port of Seattle 2012 Preliminary Budget
Key Goals Major Tasks Measure Targets
Further develop recycling Active use of recycling
program facilities at Terminal facilities in place at Seaport
91. operated facilities Q1-Q4
Seaport Security & Emergency Preparedness
Maintain compliance with
Federal security mandates for
Seaport facilities and further
enhance Emergency
Preparedness program.
Further develop working
relationship with U.S. Coast Meet federal mandates for
Guard. security measures. No violation notices/penalties. Q1-Q4
Maintain
regular
schedule
Meet federal mandates for Develop and conduct training throughout
training/exercises and regular exercises. the year
Identify grant opportunities Per grant
that align with Seaport application
operational needs Grants secured. schedule
Research and identify potential Q2 ahead
technologies to improve Increased operational of budget
efficiency of operations. efficiencies at facilities. process
Collaborate with Aviation Program features are
Division to develop and acceptable to all divisions and
implement comprehensive no operational or policy
Emergency Preparedness conflicts between the
Program (EPP) portwide. Emergency Operations Plans. Q1-Q2
Full and active participation in Attend scheduled meetings for
the U.S. Coast Guard Area both committees. Ensure Port
Maritime Committee (AMSC) interests and business
and Harbor Safety Committee continuity is considered before Per
(HSC). security/safety measures are meeting
implemented schedules
V-14
Port of Seattle 2012 Preliminary Budget
TABLE V-4: CRUISE & MARITIME OPERATIONS BUSINESS PLAN FORECAST
($ in 000's) Compound
Budget Budget Forecast Growth
OPERATING BUDGET Notes 2011 2012 2013 2014 2015 2016 2011-2016
Operating Revenue $ 16,765 $ 17,269 $ 15,749 $ 16,411 $ 17,097 $ 17,388 0.7%
Operating & Maintenance Expense 10,466 9,545 7,992 7,852 8,050 8,203 -4.8%
Corporate Administrative Expense 1 4,132 4,457 4,680 4,914 5,160 5,418 5.6%
Total Operating Expense 14,598 14,002 12,672 12,766 13,210 13,620 -1.4%
Net Operating Income Before Depreciation 2,167 3,267 3,077 3,646 3,887 3,768 11.7%
Total Depreciation Expense 8,863 9,041
Net Operating Income After Depreciation $ (6,696) $ (5,773)
Total
2012-2016
COMMITTED CAPITAL BUDGET 2 $ 6,524 $ 3,855 $ - $ - $ - $ - $ 3,855
mabpfor.xls
Notes:
1) Consists of remaining Corporate costs to be allocated to Business Groups after direct charges have been coded to Groups and Divisions
or other costs allocated to Divisions. Most costs are allocated using a formula based on Expenses and employees. For some departments,
specific allocation methodologies, such as employees for Human Resources & Development, are used.
2) See Section X for details of Capital Budget - does not include business plan prospective projects.
V-15
Port of Seattle 2012 Preliminary Budget
E. SEAPORT OPERATING BUDGET SUMMARY
TABLE V-5: REVENUE BY ACCOUNT
(in 000's) % Change
2010 2011 2012 2012 Bud -
REVENUE BY ACCOUNT Notes Actual Budget Budget 2011 Bud
Operating Revenue
Dckg, Whrfg, Serv/Facility, Passenger Fee $ 2,531 $ 2,152 $ 3,327 54.6%
Equipment Rental 9,036 8,956 7,465 -16.6%
Berthage & Moorage 1,332 1,202 373 -69.0%
Revenue From Sale of Utilities 4,341 4,185 4,475 6.9%
Property Rental Revenue 77,878 77,997 80,222 2.9%
Other Revenues 2,161 3,661 2,289 -37.5%
Total Operating Revenue $ 97,279 $ 98,153 $ 98,151 0.0%
marbud.xls mardata
FIGURE V-3: SEAPORT DIVISION REVENUE BY ACCOUNT
($ in 000's)
Dckg, Whrfg,
Serv/Facility, Passenger Equipment Rental
Fee 7.6%
Other Revenues 3.4%
2.3% Berthage & Moorage
0.4%
Revenue From Sale of
Utilities
4.6%
Property Rental Revenue
81.7%
Total Revenue: $98,151
V-16
Port of Seattle 2012 Preliminary Budget
TABLE V-6: OPERATING AND MAINTENANCE EXPENSES BY ACCOUNT
($ in 000's) % Change
2010 2011 2012 2012 Bud -
EXPENSE BY ACCOUNT Notes Actual Budget Budget 2011 Bud
Salaries, Wages, Benefits & Workers Comp $ 7,581 $ 7,730 $ 7,848 1.5%
Equipment Expense 96 163 176 8.0%
Utilities 4,553 4,817 5,014 4.1%
Supplies & Stock 54 51 37 -27.5%
Outside Services 3,084 5,272 5,141 -2.5%
Travel & Other Employee Expenses 404 604 749 24.0%
Promotional Expenses 116 216 205 -5.1%
Other Expenses 3,306 5,260 2,757 -47.6%
Total O&M without Environmental 19,194 24,112 21,929 -9.1%
Environmental Expense 1 1,439 500 -100.0%
Total O&M with Environmental 20,633 24,612 21,929 -10.9%
Charges to Capital Projects (1,111) (1,365) (1,521) 11.4%
Total Budgeted Operating Expense $ 19,522 $ 23,247 $ 20,408 -12.2%
marbud.xls mardata
Notes:
1) Seaport operating expenses in 2010 budget were reduced by $13 millions due to reclassification of
environmental expense from Operating to Non-Operating Expense.
FIGURE V-4: SEAPORT DIVISION EXPENSE BY ACCOUNT
($ in 000's)
Promotional
Expenses
Travel & 0.9%
Other Employee
Expenses Other Expenses
3.4% 12.6%
Salaries, Wages, Benefits
& Workers Comp
35.8%
Outside Services
23.4%
Utilities
22.9%
Equipment Expense
0.8%
Supplies & Stock
0.2%
Total Before Charges to Capital Projects: $21,929
Charges to Capital Projects: $1,521
Total Expense: $20,408
V-17
Port of Seattle 2012 Preliminary Budget
TABLE V-7: SEAPORT REVENUE AND EXPENSE BY BUSINESS GROUP/DEPARTMENT
($ in 000's) % Change
2010 2011 2012 2012 Bud -
BY BUSINESS GROUP/DEPARTMENT Notes Actual Budget Budget 2011 Bud
REVENUE
Lease and Asset Management $ 80,248 $ 81,474 $ 81,000 -0.6%
Cruise and Maritime Operations 15,240 13,263 15,554 17.3%
Security Grants 1,791 3,415 1,598 -53.2%
Environmental Grants - - -
Total Operating Revenue 97,279 98,153 98,151 0.0%
EXPENSES BEFORE CHARGES TO CAPITAL, NON-OPS, & ENV
Business Groups:
Lease and Asset Management 2 5,837 8,414 8,189 -2.7%
Cruise and Maritime Operations 3,899 3,366 3,985 18.4%
Security Grant Expense 1,982 3,451 1,476 -57.2%
Total Business Group Expense 11,717 15,231 13,649 -10.4%
Service Depts:
Commercial Strategy 1,215 1,874 1,841 -1.7%
Seaport Environmental and Planning 4,607 4,806 4,554 -5.2%
Seaport Finance 607 1,030 1,127 9.3%
Other
Seaport Administration 1,044 921 758 -17.7%
Seaport Contingency - 250 - -100.0%
Seaport Environmental Remediation Liability Expense 1,439 500 - -100.0%
Seaport Capital to Expense 4 - -
Total Services Expense 8,916 9,381 8,280 -11.7%
Total Expenses Before Charges to Capital, Non-Ops, & Env Remed 20,633 24,612 21,929 -10.9%
CHARGES TO CAPITAL, NON-OPS, & ENV REMEDIATION (1,111) (1,365) (1,521) 11.4%
OPERATING & MAINTENANCE EXPENSE
Business Groups:
Lease and Asset Management 2 5,785 8,331 8,061 -3.2%
Cruise and Maritime Operations 3,890 3,366 3,985 18.4%
Security Grant Expense 1,982 3,451 1,476 -57.2%
Total Business Group Expense 11,657 15,149 13,522 -10.7%
Service Depts:
Commercial Strategy 1,215 1,874 1,841 -1.7%
Seaport Environmental and Planning 3,557 3,657 3,275 -10.4%
Seaport Finance 607 896 1,012 12.9%
Other
Seaport Administration 1,039 921 758 -17.7%
Seaport Contingency - 250 - -100.0%
Seaport Environmental Remediation Liability Expense 1,439 500 - -100.0%
Seaport Capital to Expense 8 - -
Total Services Expense 7,865 8,098 6,886 -15.0%
Total Operating Expense 1 $ 19,522 $ 23,247 $ 20,408 -12.2%
marbud.xls.marreorg
Notes:
1) The Seaport Division was reorganized in November 2010. Due to staffing transfers, year to year amounts by businesses and
departments are not directly comparable.
2) Terminal 117 was transferred to Real Estate for 2012 Budget.
V-18
Port of Seattle 2012 Preliminary Budget
F. STAFFING
The following TABLE V-8 outlines the Full-Time Equivalents (FTEs) in the Seaport Division. Seaport is
budgeting 59.9 FTE's for 2012, which is .5 FTE less than the 2011 budget.
TABLE V-8: SEAPORT DIVISION STAFFING
STAFFING
(Full-Time Equivalent Positions) % Change
2010 2011 2011 2012 2012 Bud -
BUSINESS GROUP/DEPARTMENT Notes Actual Budget Est. Act. Budget 2011 Bud
Business Groups:
Lease & Asset Management 1 0.0 9.6 8.9 9.7 1.0%
Containers and Support Properties 1 5.6 0.0 0.0 0.0
Cruise & Maritime Operations 1 0.0 10.3 10.3 10.3 0.0%
Cruise and Industrial Properties 1 9.3 0.0 0.0 0.0
Total Business Groups 14.9 19.9 19.2 20.0 0.5%
Professional and Technical Servcies:
Commercial Strategy 4.3 9.3 9.3 9.3 0.0%
Seaport Enviromental & Planning 19.3 19.6 19.6 19.6 0.0%
Seaport Finance & Budget 4.6 8.6 9.0 9.0 4.7%
Seaport Security 2 5.0 0.0 0.0 0.0
Seaport Planning 3 5.3 0.0 0.0 0.0
Total Professional and Technical Services 38.5 37.5 37.9 37.9 1.1%
Other
Seaport Administration 4.0 3.0 2.0 2.0 -33.3%
Asia Business Development 4 2.0 0.0 0.0 0.0
TOTAL SEAPORT DIVISION 59.4 60.4 59.1 59.9 -0.8%
FTE.XLS
Notes:
The Seaport Division was reorganized in November 2010.
1) Lease & Asset Management and Cruise & Maritime Operations business groups were formed and Containers and Support
Properties and Cruise and Industrial Properties business groups were discontinued.
2) Seaport Security is now part of Cruise & Maritime Operations
3) Seaport Planning is now part of Seaport Enviromental & Planning
4) Asia Business Development is now part of Commercial Strategy
V-19
Port of Seattle 2012 Preliminary Budget
G. SEAPORT CAPITAL BUDGET
TABLE V-9: SEAPORT DIVISION CAPITAL BUDGET SUMMARY
($ in 000's) 2012 2012-2016 % of 2012 Total
Budget CIP Committed
Committed Capital Projects
Lease & Asset Management $19,981 $24,571 77.7%
Cruise & Maritime Operations 3,855 3,855 15.0%
Environmental Services 470 7,360 1.8%
General Seaport 1,400 5,958 5.4%
Security 0 0 0.0%
Total Committed $25,706 $41,744 100.0%
Business Plan Prospective Projects $4,868 $254,396
Total CIP $30,574 $296,140
capsum.xls
FIGURE V-5: SEAPORT DIVISION COMMITTED CAPITAL BUDGET
($ in 000's)
General Seaport
Environmental Services 5.4%
1.8%
Cruise & Maritime
Operations
15.0%
Lease & Asset
Management
77.7%
Committed CIP Total Spending: $25,706
V-20
Port of Seattle 2012 Preliminary Budget
H. SEAPORT DIVISION OPERATING STATISTICS
TABLE V-10: SEAPORT DIVISION OPERATING STATISTICS
International Containerized Trade Total Int'l & Dom. TEUS
Port of Seattle
Metric Tons Total TEU's Seattle Other Harbor
Total Total Total
Year (in 1000's) Growth Growth TEU's Growth TEU's TEU's Growth
2000 9,899 10.7% 1,201,841 0.6% 1,346,830 -0.6% 141,437 1,488,267 -0.1%
2001 8,366 -15.5% 1,052,789 -12.4% 1,163,388 -13.6% 151,721 1,315,109 -11.6%
2002 8,407 0.5% 1,173,248 11.4% 1,291,790 11.0% 147,082 1,438,872 9.4%
2003 7,891 -6.1% 1,184,698 1.0% 1,397,658 8.2% 88,724 1,486,382 3.3%
2004 9,720 23.2% 1,466,251 23.8% 1,687,768 20.8% 88,090 1,775,858 19.5%
2005 11,975 23.2% 1,745,798 19.1% 1,968,455 16.6% 119,474 2,087,929 17.6%
2006 11,377 -5.0% 1,636,261 -6.3% 1,858,652 -5.6% 128,708 1,987,360 -4.8%
2007 12,407 9.1% 1,628,494 -0.5% 1,848,186 -0.6% 125,318 1,973,504 -0.7%
2008 10,556 -14.9% 1,376,496 -15.5% 1,575,622 -14.7% 128,870 1,704,492 -13.6%
2009 10,469 -0.8% 1,284,541 -6.7% 1,466,046 -7.0% 118,550 1,584,596 -7.0%
2010 14,603 39.5% 1,835,575 42.9% 2,008,961 37.0% 130,616 2,139,577 35.0%
2011 Forecast 12,482 -14.5% 1,560,240 -15.0% 1,773,000 -11.7% 127,000 1,900,000 -11.2%
2012 Budget 13,200 5.8% 1,650,000 5.8% 1,875,000 5.8% 125,000 2,000,000 5.3%
Compound Growth
2000-2010 4.0% 4.3% 4.1% 3.7%
2005-2010 4.0% 1.0% 0.4% 0.5%
marstat.xls
Port of Seattle Facilities Total Tonnage
Domestic International Total
Metric Tons Metric Tons Metric Tons
Year (in 1000's) Growth (in 1000's) Growth (in 1000's) Growth
2000 3,405 -4.0% 12,225 10.7% 15,630 7.1%
2001 2,611 -23.3% 11,214 -8.3% 13,825 -11.5%
2002 2,055 -21.3% 10,141 -9.6% 12,196 -11.8%
2003 2,341 13.9% 11,062 9.1% 13,403 9.9%
2004 2,453 4.8% 13,676 23.6% 16,129 20.3%
2005 2,369 -3.4% 17,078 24.9% 19,447 20.6%
2006 2,615 10.4% 17,327 1.5% 19,942 2.5%
2007 2,546 -2.6% 17,777 2.6% 20,323 1.9%
2008 2,266 -11.0% 16,940 -4.7% 19,206 -5.5%
2009 1,947 -14.1% 15,943 -5.9% 17,890 -6.9%
2010 1,907 -2.1% 19,975 25.3% 21,882 22.3%
2011 Forecast 1,965 3.0% 17,857 -10.6% 19,822 -9.4%
2012 Budget 1,924 -2.1% 18,568 4.0% 20,492 3.4%
Compound Growth
2000-2010 -5.6% 5.0% 3.4%
2005-2010 -4.2% 3.2% 2.4%
marstat.xls
Source: Port of Seattle Internal Tonnage Reporting Statistics System.
V-21
Port of Seattle 2012 Preliminary Budget
REAL ESTATE DIVISION
A. 2012 BUDGET SUMMARY
TABLE VI-1: 2012 CASHFLOW SUMMARY
Percent
($ in 000s) 2012 of Total
SOURCES OF CASH
Operating Revenues $ 32,401 57.4%
Interest Receipts 62 0.1%
Proceeds from Bond Issues - 0.0%
Grants and Capital Contributions 300 0.5%
Tax Levy 23,634 41.9%
Other Receipts 22 0.0%
Total 56,419 100%
USES OF CASH
Expenses from Operations:
Operating & Maintenance Expense 30,530 50.5%
Corporate Administrative Expense 5,344 8.8%
Law Enforcement Costs 1,350 2.2%
Environmental Expenditures - 0.0%
Total Operating Expenses 37,224 61.6%
Debt Service:
Interest Payments 4,972 8.2%
Bond Redemptions 3,092 5.1%
Total Debt Service 8,064 13.3%
Other Expenses 619 1.0%
Public Expense - 0.0%
Capital Expenditures 14,524 24.0%
Total $ 60,431 100%
Cashflow.xls RE
Note: We built-up a significant cash balance in the past few years due to economic uncertainty, and we
are planning to draw down the cash balance in 2012.
VI-1
Port of Seattle 2012 Preliminary Budget
FIGURE VI-1: SOURCES OF CASH
($ in 000's)
Other Receipts
0.0%
Tax Levy
41.9% Operating
Revenues
57.4%
Proceeds from
Bond Issues
0.0%
Interest Receipts Total Sources: $56,419
0.1% Grants and
Capital
Contributions
0.5%
FIGURE VI-2: USES OF CASH
($ in 000's)
Public Expense Capital
0.0% Expenditures
24.0% Operating &
Maintenance
Other Expenses Expense
1.0% Interest 50.5%
Bond Payments
Redemptions 7%
5.1%
Environmental
Expenditures
0.0%
Law Enforcement
Corporate Total Uses: $60,431
Costs
2% Administrative
Expense
8%
VI-2
Port of Seattle 2012 Preliminary Budget
B. BUSINESS PLAN FORECAST
TABLE VI-2: BUSINESS PLAN FORECAST
($ in 000's) Compound
Budget Budget Forecast Growth
OPERATING BUDGET Notes 2011 2012 2013 2014 2015 2016 2011-2016
Operating Revenue $ 30,707 $ 32,401 $ 33,033 $ 33,760 $ 34,478 $ 35,298 2.8%
Operating & Maintenance Expense 29,434 30,530 29,925 30,326 31,068 31,687 1.5%
Corporate & Capital Development Division Costs 1 5,376 5,344 5,632 5,934 6,253 6,588 4.2%
Law Enforcement Costs 1,269 1,350 1,397 1,446 1,497 1,549 4.1%
Total Operating Expense 36,079 37,224 36,954 37,706 38,818 39,824 2.0%
Net Operating Income Before Depreciation (5,372) (4,823) (3,921) (3,948) (4,340) (4,526) -3.4%
Total Depreciation Expense 10,166 9,694
Net Operating Income After Depreciation $ (15,538) $ (14,517)
Total
2012-2016
Committed Capital Budget $ 15,357 $ 10,924 $ 4,666 $ 1,999 $ 1,866 $ 1,870 $ 21,325
Business Plan Prospective 5,000 3,600 7,825 10,660 3,950 6,671 32,706
TOTAL CAPITAL BUDGET 2 $ 20,357 $ 14,524 $ 12,491 $ 12,659 $ 5,816 $ 8,541 $ 54,031
edbpfor.xls
Notes:
1) Consists of remaining Corporate & Capital Development costs to be allocated to Real Estate after direct charges have been coded to
Business Groups and Divisions or other costs allocated to Divisions. Most costs are allocated using a formula based on Expenses and
employees. For some departments specific allocation methodologies, such as employees for Human Resources & Development, are used.
2) See Section X for details of Capital Budget.
C. DIVISION MISSION STATEMENT
Our mission is to:
Efficiently and cost-effectively manage and develop our assets for the benefit of our customers and
the public;
Provide services and facilities to our customers, the public and for the commercial activities of local
businesses;
Maintain Fishermen's Terminal as the homeport to the North Pacific Fishing Fleet by providing
facilities and services that support the commercial fishing and other maritime industries, including
other commercial craft, while maximizing financial performance;
Promote the economic health of our community;
Ensure our businesses, facilities, and activities are the most efficient, cleanest and greenest in the
country, at a reasonable cost; and
Maintain the Eastside Rail Corridor for future infrastructure needs and enact an interim management
plan to maximize the performance of the asset.
INTRODUCTION
The Real Estate Division is committed to increasing the economic vitality of our region and generating new
business opportunities for the Port. This will be accomplished by leveraging the Port's partnerships with local
and regional commercial and industrial businesses and real estate partners. The Real Estate Division also
intends to identify and pursue opportunities that enhance the region's long-term vitality and ultimately produce
new revenue for the Port.
VI-3
Port of Seattle 2012 Preliminary Budget
The Real Estate Division (RED) integrates the efforts of five functional workgroups: Real Estate Development
& Planning, Harbor Services, Marine Maintenance, Portfolio Management and Pier 69 Facilities Management.
These business and service groups oversee the development and management of various Port assets and vessel
moorage facilities. Financial services, project management, facility planning, and environmental services are
acquired from the Seaport Division.
Following are the five business groups and their functions:
Real Estate Development & Planning: Plans and facilitates the development of selected real estate assets
currently within its own portfolio and provides development expertise and support to the Seaport and Aviation
Divisions. The team also identifies and evaluates new opportunities outside the Port's current portfolio and
completes other transactions related to Port assets.
Harbor Services: Operates & leases moorage/storage/yard facilities and provides a variety of services. Its
two commercial fishing moorage facilities, home to the North Pacific Fishing Fleet, provide space for more
than 600 commercial fishing vessels, commercial work vessels as well as recreational vessels. Its three
recreational marinas provide facilities for more than 1,600 recreational, commercial & some commercial
fishing vessels.
Portfolio Management: Leases, markets, and manages the Division's portfolio of conference, office, retail,
commercial, and industrial properties and works to enhance the value of the Division's assets through strategic
asset planning and repositioning. This business unit will also lead the asset management efforts related to the
Eastside Rail Corridor and the enhancement of the Port's Foreign Trade Zone.
Marine Maintenance: Provides comprehensive maintenance, repair and small capital services to properties
and equipment in the Real Estate and Seaport Divisions.
Pier 69 Facilities Management: Provides management services for Port Headquarters, including the Pier 69
Motor Pool, Print Shop, Shipping & Receiving, and Mail/Messenger, the Portside Caf and Pier 69
Conference Center.
BUSINESS STRATEGIES
Maximize occupancy rates at all properties to support Port business initiatives;
Maximize vessel moorage occupancy and revenues at our five commercial and recreational facilities;
Improve, maintain and update our facilities to meet new market demands and provide compelling value to
current and future tenants.
TRIPLE BOTTOM LINE
The Real Estate Division, as part of the Port of Seattle, is a public agency with a mission to accomplish public
goals that provide economic benefits to the region as a whole. It must operate its properties like a business,
relying on revenues from our customer base for most of its net operating income & continually finding ways to
reduce expenses by operating efficiently & cost-effectively. Achieving a strong financial bottom line allows
the Real Estate Division to invest in projects that benefit the entire community, both economically and
environmentally. It is this combination of financial performance along with economic, as well as community
and environmental benefits, that serves as the Real Estate Division's Triple Bottom Line:
Economic Benefits:
We create economic benefits for the entire region through our business activities. All of our activities and
each of our tenants create jobs and bring business income and tax dollars to the region and the state.
Community and Environmental Benefits:
While community and environmental benefits are harder to quantify, they are an important part of the Port of
Seattle's mission. The Real Estate Division is a steward of the environment. We improve the environmental
condition of our property through our redevelopment and capital projects, providing new and/or improved
public open spaces, taking steps to reduce air & water pollution, conserving energy and water, and ensuring
facility activities are the cleanest & greenest, including recycling to reduce the amount of garbage we produce.
VI-4
Port of Seattle 2012 Preliminary Budget
The community also benefits from regional transportation projects made possible with our participation and
leadership in both planning and funding as well as the economic benefits produced by our business activities.
Financial Sustainability:
The most critical measure of the Real Estate Division's financial sustainability is a growing, positive Net
Operating Income (NOI). Only with strong financial performance, can it provide the economic, community
and environmental benefits that are the essence of its mission.
PARTNERSHIPS
We would not be able to fulfill our mission without positive relationships with our stakeholders and partners.
We are focused on:
Meeting the needs of our customers by:
Facilitating customer relationships;
Strengthening relationships with our stakeholders and partnering with them wherever possible;
Developing new business opportunities.
Approaching our relationship with labor honestly and with integrity, communicating effectively and
working together under fair labor agreements.
Respecting tribal sovereignty and tribal religious and cultural values in all consultations with our tribal
neighbors.
VI-5
Port of Seattle 2012 Preliminary Budget
2012 REAL ESTATE DIVISION STRATEGIES
KEY STRATEGIES AND OBJECTIVES
STRATEGY: ENSURE PORT AND REAL ESTATE DIVISION GROUP VITALITY
KEY OBJECTIVE: Achieve Financial Objectives
($4,823) thousand NOI before Depreciation. Each Business Group will contribute to the total Division NOI
as budgeted:
Real Estate Development & Planning NOI = ($923) Thousand
Harbor Services NOI = ($2,236) Thousand
Portfolio Management NOI = ($1,067) Thousand
Eastside Rail NOI = ($599) Thousand
KEY OBJECTIVE: Increase Property Utilization
Maintain 87% occupancy of commercial properties;
Achieve moorage occupancy of: Recreational Marinas 94%, Fishing & Commercial facilities 84%;
Complete transition to new management contract for conference and event centers by May 31st;
Renew Shilshole Bay Marina liveaboard agreement;
Adopt Fishermen's Terminal 20 Year Re-development Plan and Net Shed Code Compliance Option:
o Finalize 20 Year Re-development and Implementation Plan and gain Commission
approval
o Integrate plan (as defined by 20 Year Plan) into operations, maintenance and capital
planning
o Begin implementation of Net Shed Code Compliance option;
Complete key 2012 construction projects:
o Fishermen's Terminal C15 Building HVAC improvements
o Fishermen's Terminal C15 Building replace east sewer line
o Pier 69 North Apron Piling Corrosion Protection;
Continue execution of Deferred Maintenance Reduction Plan by completing projects funded in 2012
Budget;
Terminal 91 Uplands - Complete development option study and initiate the environmental review
process;
Des Moines Creek Business Park - Complete new development agreement with City.
STRATEGY: DEVELOP NEW BUSINESS AND ECONOMIC OPPORTUNITIES FOR THE
REGION AND THE PORT
KEY OBJECTIVE: Build Relationships and Partnerships to Develop Business Opportunities for Local
Businesses
Purchase at least 15% of all goods and services from qualified small businesses.
STRATEGY: EXHIBIT ENVIRONMENTAL STEWARDSHIP THROUGH OUR ACTIONS
KEY OBJECTIVE: Strive to Integrate Environmental and Business Objectives into our Organization
Maintain Clean Marina Washington/EnviroStar Certification at Harbor Services facilities;
Zero tenant environmental regulatory violations;
Electrical consumption at Pier 69 Facility is within 5% of 2011 level;
Zero increase in landfill waste from the Marine Maintenance shop.
STRATEGY: BE A HIGH PERFORMANCE ORGANIZATION
KEY OBJECTIVE: Attract and Retain Valuable Employees and Provide a Culture of Clear
Expectations and Accountability
VI-6
Port of Seattle 2012 Preliminary Budget
Achieve a perfect safety score and zero accidents.
HARBOR SERVICES
MISSION
Provide moorage facilities, equipment and services to fishing, commercial and recreational vessel
operators;
Maintain Fishermen's Terminal as the homeport to the North Pacific Fishing Fleet by providing facilities
and services that support the commercial fishing and other maritime industries while maximizing financial
performance;
Manage cost-effective operations that deliver the best value for our customers' dollars, provide the level of
services that will distinguish us from other moorage facilities, provide a rewarding work environment for
our employees and promote a spirit of partnership within the communities that we serve.
DESCRIPTION
Harbor Services provides and operates moorage facilities in various locations throughout Seattle, including a
full range of services, to meet the needs of a diverse group of vessel operators. The facilities are:
Bell Harbor Marina
Fishermen's Terminal
Harbor Island Marina (Terminal 102)
Maritime Industrial Center
Shilshole Bay Marina
Together these facilities supply over 2,000 moorage slips, and related products, for fishing, recreational, Tribal
and other commercial vessels up to 400' including supporting services. There are approximately 3,000
monthly moorage customers and approximately 13,000 guest moorage visitors annually. Customer service is
our primary focus. Customer types include: commercial and sport fishermen, commercial pleasure and
workboat operators, recreational boaters, Tribal members and the largest live-aboard community in the State of
Washington (approximately 550 people).
There is a strong link between the facilities and the Ballard, Magnolia, Central Seattle Waterfront and West
Seattle communities.
BUSINESS STRATEGY
Retain customers;
Achieve net operating income by maximizing revenues, effectively utilizing vessel moorage, yard &
locker areas and controlling expenses;
Improve & maintain assets & facilities in a manner that provides compelling value to customers;
Minimize risks of loss, both economic and physical, to the public;
Strive to be the cleanest and greenest harbor facilities at a reasonable cost by following Marina Best
Management Practices, continuing our various environmental programs, and educating our customers and
employees.
VI-7
Port of Seattle 2012 Preliminary Budget
KEY STRATEGIES AND OBJECTIVES
STRATEGY: ENSURE DIVISION AND HARBOR SERVICES GROUP VITALITY
Key Objective: Maximize financial performance
Performance Measure: Achieve Net Operating Income
Performance Objective Performance Target Task/Activity/Program/Initiative
Harbor Services Total ($2,236) thousand
Fishing/Commercial ($3,128) thousand Monthly review of plans and spending to
meet targets (revenues & expenses).
Execute operations & marketing plans;
adjust as necessary throughout the year.
Recreational Boating $893 thousand Same as above.
Achieve goals for Total Fishing: 84% Fill vacancies in the shortest duration of
occupancy of vessel FT: 84% time.
moorage areas
MIC: 72% Effectively manage derelict vessels,
insurance program & collections process.
Total Recreational: 94% Execute and revise marketing plans as
needed to respond to market flucuations
SBM: 95%
throughout the year.
HIM: 89%
BHM: 71%
Advance Fishermen's Work with Portfolio Portfolio Management will lead and HSG
Terminal 20 Year Management to will support the advancement of a
Redevelopment Planning complete planning development alternative for FT landside that
Process analysis & supports the fishing industry and provides
recommendation to financial return to the Port overall. This will
Port Commission, and include the Net Sheds Storage Option.
begin potential Gain approval from Port Commission.
environmental review.
Integrate 20 year FT
Integrate 20 year Asset Condition
Asset Plan into
Maintenance & Assessment into operations, maintenance &
Capital planning. capital plans.
Implement Net Shed Complete analysis of Advance alternative for bringing net locker
Buildings Code code compliance buildings into code compliance and gain
Compliance Option options & Commission approval on design option &
recommendation & implement.
gain approval from Complete design & permitting (as needed)
Port Commission. for construction of applicable improvements
Complete design required per code.
improvements &
permitting (as
needed).
Update Shilshole Site Plan Complete year end. Working with Portfolio Management, and
an outside consultant, update existing site
plan. Examine implications of Shoreline
VI-8
Port of Seattle 2012 Preliminary Budget
regulations.
Renew Shilshole Notification to Complete review of existing Agreement and
Liveaboard Agreement liveaboard officers by work with liveaboards to revise as necessary
February 26, 2012. & implement agreement.
Agreement complete
by August 2012.
Key Objective: Minimize risk of loss, both economic & physical
Performance Measure: Achieve Net Operating Income
Performance Objective Performance Target Task/Activity/Program/Initiative
Implement actions from Identify actions & a Identify four action items, complete action
Enterprise Risk budget by end Q3. plans and budget. Begin implementation.
Management priorities Begin implementation
of four actions by end
of year.
STRATEGY: DEVELOP NEW ECONOMIC OPPORTUNITY FOR THE REGION AND THE PORT
Key Objective: Build relationships and partnerships to develop new business opportunities for the Port and
local businesses to compete in the global economy.
Performance Measure: % of HSG operating & capital expenditures
Performance Objective Performance Target Task/Activity/Program/Initiative
Utilize small businesses. 15% of direct expense When feasible, utilize qualified small
businesses.
STRATEGY: EXHIBIT ENVIRONMENTAL STEWARDSHIP THROUGH OUR ACTIONS
Key Objective: Strive to integrate environmental and business objectives into our organization.
Performance Measure: EnviroStar certification maintained. Zero regulatory violations.
Performance Objective Performance Target Task/Activity/Program/Initiative
Maintain Clean Marina Certification renewed Maintain standards to satisfy regulatory bi-
Washington/EnviroStar at all HSG facilities. annual certification requirements.
Certifications.
Enforce Marina Best Zero regulatory Work with Environmental to update BMP's
Management Practices violations. (annually).
(BMP's) & agency Complete update of Staff educates customers & enforces BMP's
regulations. BMP's Q2. when on the docks, follows regulatory
requirements and carries out internal
environmental procedures.
Identify Green Port Capital Projects analysis Analyze all Green Port capital projects in
Projects to be implemented. completed by Q2. conjunction with planned capital
Incorporate identified improvement projects, in coordination with
Green improvements Portfolio Management and Environmental,
into planned 2013 and decide ones to be implemented.
capital projects in Q3.
VI-9
Port of Seattle 2012 Preliminary Budget
Key Objective: Provide a culture of clear job expectations and accountabilities & develop employees.
Provide a safe workplace.
Performance Measure: Employee PREP plans completed with accountabilities & development plan. 100%
on safety audit.
Performance Objective Performance Target Task/Activity/Program/Initiative
Maintain an educated 100% of PREP plans All employees understand accountabilities
employee workforce. include clear & how their work links to the Harbor
accountabilities, a Services Business Plan & the Port
training/development initiatives.
plan & diversity All PREP plans include a
component. training/development plan.
All staff attends or participates in at least
one diversity activity or event as part of
PREP Plan.
Improve Employee Implement action plans. Work with employees to implement
Survey Results identified focus areas/action plans from
2011 survey results & HSG Workshop.
Maintain a safe 100% safety score 100% of employees complete all
workplace for all Zero accidents requirements and training as identified in
employees. the Facility Safety Plans.
TABLE VI- 3: REAL ESTATE HARBOR SERVICES BUSINESS PLAN FORECAST
($ in 000's) Forecast Compound
Budget Budget Growth
OPERATING BUDGET Notes 2011 2012 2013 2014 2015 2016 2011-2016
Operating Revenue $ 11,456 $ 11,641 $ 11,804 $ 12,012 $ 12,181 $ 12,457 1.7%
Operating & Maintenance Expense 9,538 9,963 9,910 10,064 10,302 10,524 2.0%
Corporate Administrative Expense 1 3,833 3,913 4,109 4,314 4,530 4,757 4.4%
Total Operating Expense 13,371 13,876 14,019 14,378 14,832 15,281 2.7%
Net Operating Income Before Depreciation (1,915) (2,236) (2,215) (2,367) (2,651) (2,823) 8.1%
Total Depreciation Expense 5,855 5,292
Net Operating Income After Depreciation $ (7,770) $ (7,527)
Total
2012-2016
COMMITTED CAPITAL BUDGET 2 $ 5,473 $ - $ - $ - $ - $ - $ -
edbpfor.xls
Notes:
1) Consists of remaining Corporate costs to be allocated to Lines of Business after direct charges have been coded to LOB's
and Divisions or other costs allocated to Divisions. Most costs are allocated using a formula based on Expenses and
employees. For some departments specific allocation methodologies, such as employees for Human Resources & Development, are used.
2) See Section X for details of Capital Budget.
VI-10
Port of Seattle 2012 Preliminary Budget
PORTFOLIO MANAGEMENT
MISSION
The mission of the Portfolio Management Department is to strategically position the Division's diverse real
estate portfolio of assets to achieve their maximum value through effective leasing and asset management. We
will accomplish our goals and provide our services with professionalism, integrity, respect for the environment
and in support of the regional economy.
DESCRIPTION
We manage, maintain, market, and lease the Division's portfolio of commercial and industrial properties and
work to enhance the value of our assets by regularly evaluating the overall performance of our portfolio to
determine the best use and configuration and also continually working to increase income and reduce
expenses. We also administer leases and manage utility billing for both the Real Estate and Seaport Divisions.
The Portfolio is comprised of properties that serve office, retail and industrial tenants. Commercial properties
located along the Port's central waterfront include:
Pier 66 (Bell Harbor International Conference Center and the Maritime Event Center),
World Trade Center West and World Trade Center, Seattle,
Bell Street Parking Garage,
Pier 69.
Other commercial properties are located at:
T-102 (Harbor Marina Corporate Center),
Ballard (Fishermen's Terminal, the Maritime Industrial Center and Shilshole Bay Marina),
West Seattle (CEM and Pier 2),
Interbay (Tsubota).
Industrial properties include:
Parts of T-34, T-46, T-86 and T-5 SE,
Eastside Rail Corridor.
BUSINESS STRATEGY
We will achieve our projected net operating income for 2012 by focusing on tenant retention, new lease
opportunities and expense controls, and selectively evaluating our portfolio to identify new revenue-generating
opportunities. We will create and implement strategic redevelopment plans for our existing assets as required.
We will manage and maintain our assets to meet the needs of our tenants and customers and preserve and
enhance each asset's value by employing appropriate levels of maintenance, repair, and environmental
controls.
MARKET FORECAST
Waterfront/Belltown/Lower Queen Anne Sub-market
Office
Vacancy rates vary by reporting services depending on exactly how the interpret the numbers, most
specifically do they include or exclude owner user buildings and are their numbers true vacancy or available
VI-11
Port of Seattle 2012 Preliminary Budget
space. These differences can create a several percentage point difference. The numbers included below come
from our Kidder Mathews Q1 2011 report.
The vacancy rate through the first quarter of 2011 for the CBD rose slightly to 13%. Significant activity in Q1
2011 has not been reflected in those numbers and vacancy is expected to drop by a full percentage point once
the tenants actually occupy the space from the recently signed leases. Some of the more significant recent
deals were:
Leases:
Amazon at 1918 8th 460,000 SF
Dendreon at Russell Investment Center 170,000 SF
Zillow at Russell Investment Center 60,000 SF
Isilon at 505 1st Ave S 140,000 SF
Zulilly at 2200 1st Ave S 90,000 SF
Sales (vacant buildings to be fully occupied by the new owner or planned tenant):
1100 Eastlake by Fred Hutch
7th & Madison by HAL (Polyclinic)
Much of the recent activity has been specific to the technology and health care sectors. We have not seen
broader market activity across all groups which will be the major indicator of a full recovery. We expect that
even with the early activity in 2011, the balance of the year will remain relatively flat from a pricing
perspective and anticipate a broader market recovery in late 2011 or early 2012 where rates should begin to
climb. Landlord concessions have started to decline, but not significantly and expect greater movement in the
same time frame mentioned above.
There is optimism in the market, but Seattle and San Francisco regions appear to be outperforming the balance
of the country. Should the overall economy experience a double dip or more issues develop from Europe,
Seattle will not be able to avoid impacts from a stall in the economic recovery.
Specifically, the World Trade Center West Building is located within a unique niche of the waterfront
submarket. There is limited public transportation and our parking is not easily accessed from Alaskan Way.
The broad awareness of the upcoming seawall replacement and viaduct construction may also impact our
ability to attract new tenants. According to the current listing broker (Kidder Matthews) the projected market
rate for this building will be will not change from the current asking rate and will remain in the range of
$20.00 to $24.00 per rentable square foot for fully-serviced space through the end of 2011 and into the 2012
budget year. Our tenants generally pay increases in operating expenses over a base year.
South Seattle Sub-Market
Industrial
The Industrial market ended the first quarter 2011 with a vacancy rate of 8.1%. The vacancy rate was down
over the previous quarter, with net absorption totaling positive 848,784 square feet in the first quarter. Vacant
sublease space increased in the quarter, ending the quarter at 1,949,089 square feet. Rental rates ended the first
quarter at $7.01, an increase over the previous quarter.
The South Seattle Industrial Market may be less affected by the economy due to the lack of available land to
develop and the fact that a majority of the property owners have held their properties for a number of years
resulting in less distressed sales in the market.
Class B Flex/Office Space
The Office market ended the first quarter 2011 with a vacancy rate of 13.0%. The vacancy rate was up over the
previous quarter, with net absorption totaling positive 325,813 square feet in the first quarter. Flex projects
also reported a vacancy rate of 13.0%, which was up from the previous quarter. The Flex building market
VI-12
Port of Seattle 2012 Preliminary Budget
recorded net absorption of negative (60,464) square feet in the first quarter 2011, compared to negative
(308,678) square feet in the fourth quarter 2010.
The south end office and flex market continues to experience high vacancy rates as tenants moving out of
space are outpacing new tenant activity. Flight to quality is also an issue, as south end tenants are taking
advantage of lower rates in downtown locations, which provide greater amenities and easy access to public
transportation. In order to entice tenants, south end landlords are reducing asking rates and offering significant
lease incentives in order to attract tenants.
Ship Canal/Ballard Submarket
The lingering effects of the recession continue to impact this market throughout 2010 and 2011. Although the
Ship Canal office submarket has a number of forces that have kept vacancy rates low such as the University of
Washington, the Bio-Medical Industry, Seattle Pacific University and the Maritime Industry, we are seeing
some non-maritime tenants being lured away by the low rents and concessions that are being offered by
landlords in the Central Business District. That being said, the attractiveness and popularity of Fremont,
Magnolia, Ballard and Wallingford are factors that have allowed many buildings in the area to retain tenants
and sustain more demand than some of the other office submarkets.
Class B Office
The vacancy rate for office space in the Ship Canal submarket, as a whole is 10.6 %compared to a 13 %
vacancy rate for the Queen Anne Magnolia submarket. The rates quoted in the various reports are for Class A
office space. Market rates for Class B office space have fallen and vary from $16.00 - $18.00/sf/NNN for
nicer well-kept Class B office space but several brokers I spoke to said a landlord would be lucky to get
$16.00/sf/NNN today for like new space. Many landlords are offering concessions like free rent and up to
$50.00/sf for TI's. The groups willing to pay market rate are government related, involve cutting edge
technology or are involved in industries like renewable energy. According to most reports and local brokers,
rates should remain flat until consistent leasing and positive absorption ease pressure on landlords.
Industrial
Most of the tenant activity is occurring in the south end industrial market. Average warehouse rates are
around $.55/sf/mo. Land is ranging from $.15-.20/sf/mo. In general the Ship Canal submarket, Ballard in
particular, is an extremely tight market. A lot of buildings are owned and occupied by businesses that have
been there for decades. In addition, the increased development in the submarket in recent years has resulted in
a decline in industrial inventory. This makes it difficult for smaller companies to lease space and in turn keeps
rents a bit higher than what is seen in submarkets like Georgetown. Despite the slow economy, 5-10K
warehouse spaces remain in high demand and lease up quickly. Spaces smaller or larger tend to stay on the
market longer. According to brokers in the area, rates for warehouse space in the 5-10K range are getting
deals done around $.50-$.65 sf/mo with an office add-on of $.70-$.75/sf/mo. Land is ranging from $.15-
$.20/sf/mo. Although there is no clear broker reporting on Industrial properties in the Ship Canal/Ballard
market, local brokers confirm that warehouse space and vacant land are scarce. In 2010 we had an appraisal
done by McKee & Schalka on the FVO Marine Ways Shipyard at FT. Land came out at $.20/sf/mo and
warehouse ranged between $6.00 - $7.80.
VI-13
Port of Seattle 2012 Preliminary Budget
KEY STRATEGIES AND OBJECTIVES
STRATEGY: ENSURE DIVISION AND PORTFOLIO MANAGEMENT GROUP VITALITY
Key Objective: Maximize financial performance.
Performance Measure:
Performance Objective Performance Target Task/Activity/Program/Initiative
Administrative expense. $1,567 thousand Monthly review and adjustment in spending to
(org basis) meet target.
Commercial/Industrial ($5,316) thousand Monthly review and adjustment in spending to
Property NOI. meet target.
Third Party NOI. $4,249 thousand Monthly review and adjustment in spending to
meet target.
Complete transition to new Management
Contract for Conference and Event Centers by
May 31.
Achieve occupancy of Year-end occupancy rate Real estate managers will work with the
Commercial Buildings at will be 87% or better. Director to refine the leasing strategy for each
87% or above in 2012. asset to respond to current market conditions.
Advance Fishermen's Completion of planning Portfolio Management will lead the 20 year
Terminal 20 Year analysis and planning process with the support of Harbor
Redevelopment Planning recommendation to Port Services and a consultant to formulate an asset
process. Commission, begin enhancement strategy, environmental review,
potential environmental and implementation plan and gain approval of
review Port Commission.
STRATEGY: DEVELOP NEW ECONOMIC OPPORTUNITY FOR THE REGION AND THE PORT
Key Objective: Build relationships and partnerships to develop new business opportunities for the Port and
local businesses to compete in the global economy.
Performance Measure: 10 % of Total Expenditures for Goods and Services.
Performance Objective Performance Target Task/Activity/Program/Initiative
Utilize small businesses 10% of total expenditures The majority of contracts for our group are led
for goods and services (in in conjunction with Maintenance and are
conjunction with reflected in their statistics. When feasible,
Maintenance) utilize qualified small businesses to provide
consulting and real estate services such as
surveys, appraisals, brokerage, and market
studies.
VI-14
Port of Seattle 2012 Preliminary Budget
STRATEGY: EXHIBIT ENVIRONMENTAL STEWARDSHIP THROUGH OUR ACTIONS
Key Objective: Strive to integrate environmental and business objectives into our organization.
Performance Measure: Zero tenant regulatory violations.
Performance Objective Performance Target Task/Activity/Program/Initiative
Support Port Visit at least four properties Real Estate managers and member(s) of
Environmental per quarter. environmental staff will inspect selected
Department's Tenant properties to ensure tenant compliance with
Compliance Program. lease environmental requirements.
Identify new green 1 new green initiative All staff participates to identify new green
initiatives identified by end of Q2. initiative that can be adopted.
STRATEGY: BE A HIGH PERFORMANCE ORGANIZATION
Key Objective: Attract and retain valuable employees and provide a culture of clear expectations and
accountability.
Performance Measure: Clarify Division and Department Mission and Goals and encourage on-going
education of staff.
Performance Objective Performance Target Task/Activity/Program/Initiative
Maintain educated 90 % of staff Staff members will attend or participate in
employee workforce. one diversity activity per year.
90% of staff
Staff members will attend at least two real
estate classes, seminars or conferences.
100% of staff Each employee will include a personal
development plan in PREP.
Identify work process Identify one new tool to Team will work together to identify new work
improvements. improve effectiveness. or technology tools to improve effectiveness (eg
rent rolls, Sharepoint, etc).
VI-15
Port of Seattle 2012 Preliminary Budget
TABLE VI-4: PORTFOLIO MANAGEMENT BUSINESS PLAN FORECAST
($ in 000's) Compound
Forecast
Budget Budget Growth
OPERATING BUDGET Notes 2011 2012 2013 2014 2015 2016 2011-2016
Operating Revenue $ 18,479 $ 19,923 $ 20,377 $ 20,877 $ 21,407 $ 21,933 3.5%
Operating & Maintenance Expense 17,680 18,503 17,957 18,177 18,629 18,980 1.4%
Corporate Administrative Expense 1 2,543 2,486 2,611 2,741 2,878 3,022 3.5%
Total Operating Expense 20,223 20,989 20,568 20,918 21,507 22,002 1.7%
Net Operating Income Before Depreciation (1,745) (1,067) (190) (41) (99) (69) -47.6%
Total Depreciation Expense 4,090 4,193
Net Operating Income After Depreciation $ (5,835) $ (5,262)
Total
2012-2016
COMMITTED CAPITAL BUDGET 2 $ 6,433 $ 4,880 $ 889 $ 432 $ 483 $ 433 $ 7,117
edbpfor.xls
Notes:
1) Consists of remaining Corporate costs to be allocated to Lines of Business after direct charges have been coded to LOB's
and Divisions or other costs allocated to Divisions. Most costs are allocated using a formula based on Expenses and
employees. For some departments specific allocation methodologies, such as employees for Human Resources & Development, are used.
2) See Section X for details of Capital Budget.
TABLE VI-5: EASTSIDE RAIL BUSINESS PLAN FORECAST
($ in 000's) Compound
Forecast
Budget Budget Growth
OPERATING BUDGET Notes 2011 2012 2013 2014 2015 2016 2011-2016
Operating Revenue $ 45 $ 22 $ 23 $ 23 $ 24 $ 24 -11.5%
Operating & Maintenance Expense 694 621 637 653 669 686 -0.2%
Corporate Administrative Expense 0 0 0 0 0 0
Total Operating Expense 694 621 637 653 669 686 -0.2%
Net Operating Income Before Depreciation (649) (599) (614) (629) (644) (661) 0.4%
Total Depreciation Expense 0 0
Net Operating Income After Depreciation $ (649) $ (599)
Total
2012-2016
COMMITTED CAPITAL BUDGET $0 $0 $0 $0 $0 $0 $0
edbpfor.xls
VI-16
Port of Seattle 2012 Preliminary Budget
DEVELOPMENT AND PLANNING
MISSION
The Real Estate Development and Planning team plans and facilitates development of selected real estate
assets currently within the Port's portfolio. The team also identifies and evaluates acquisition opportunities
outside the Port's current portfolio and completes ground leases and sales of Port assets. These activities are
aimed at promoting regional economic vitality, facilitating job creation and retention, creating new revenue for
the Port and the region, and enhancing the built and natural environment.
DESCRIPTION
The team connects the Port's mission of creating regional economic vitality through two real estate-related
initiatives:
Initiative 1 advances planning and development of certain assets the Port currently owns. Past
strategic planning efforts underscored the Port's need to improve utilization of existing assets.
Initiative 2 involves the identification and timely response to new opportunities and projects and,
where appropriate, the completion of these transactions.
BUSINESS STRATEGY
In 2012, the team will continue working on projects that will advance the Port's role in catalyzing regional
economic development through improved asset utilization. The strategy will center on generating near-term
revenue from those sites with such potential and continued progress on those sites that have a longer time
horizon for new revenue and job generation. In addition, the team will continue to assist the Aviation Business
Development group with its land development program in the cities of Des Moines, Burien and SeaTac and the
Seaport Division in its search for off-dock lands.
KEY STRATEGIES AND OBJECTIVES
STRATEGY: ENSURE DIVISION AND DEVELOPMENT AND PLANNING GROUP VITALITY
Key Objective: Maximize financial performance
Performance Measure:
Performance Objective Performance Target Task/Activity/Program/Initiative
Terminal 91 Uplands Advance redevelopment of Complete environmental review process
the site associated with development options study.
Potentially begin implementation of
recommended development option.
Finalize and obtain commission approval of a
potential land exchange agreement with Seattle
Parks & Recreation for the West Yard site.
Des Moines Creek Advance entitlement of the Negotiate and execute new development
Business Park site agreement with the City of Des Moines.
Negotiate and execute potential option
agreement with the City of Des Moines for a
retail component.
Coordinate entitlement work and plan
VI-17
Port of Seattle 2012 Preliminary Budget
review following execution of a potential
ground lease with PSE.
Negotiate and execute potential ground
lease for the FAA project.
BurienNortheast Continue implementation of Solicit offers, negotiate and execute
Redevelopment Area NERA redevelopment agreements related to potential sale of Lora
strategy recommendations Lake apartments site.
Collaborate with the City of Burien on a
possible application for FAA pilot project
funds.
City SeaTac Sites Advance redevelopment S. 200th Street Site - coordinate entitlement
planning work and plan review following execution
of a potential ground lease with Harvest
Power.
28th Avenue S. Site - negotiate and execute
potential ground lease for the FAA project.
Doug Fox Site - complete all due diligence
activities. Draft and issue potential RFP.
Hotel Study complete three-phase
feasibility analysis. Draft and issue
potential RFP.
Acquisition/Sales/Long Complete purchase or sale Complete second land swap with WSDOT
Term Leases of key sites for the Des Moines property.
STRATEGY: BE A HIGH PERFORMANCE ORGANIZATION
Key Objective: Attract and retain valuable employees and provide a culture of clear expectations and
accountability.
Performance Measure:
Performance Objective Performance Target Task/Activity/Program/Initiative
Maintain educated 90% of staff Staff members will attend or participate in
employee workforce. one diversity activity per year.
90% of staff Staff members will attend at least two real
estate classes, seminars or conferences.
Each employee will include a personal
100% of staff development plan in PREP.
Achieve staffing level 100% of needed staff hired Assess need to hire project assistant. If
needed to implement key needed, post position and hire project
initiatives. assistant.
VI-18
Port of Seattle 2012 Preliminary Budget
TABLE VI-6: DEVELOPMENT AND PLANNING BUSINESS PLAN FORECAST
($ in 000's) Compound
Forecast
Budget Budget Growth
OPERATING BUDGET Notes 2011 2012 2013 2014 2015 2016 2011-2016
Operating Revenue $ 724 $ 812 $ 829 $ 847 $ 865 $ 884 4.1%
Operating & Maintenance Expense 1,518 1,439 1,421 1,432 1,468 1,497 -0.3%
Corporate Administrative Expense 1 268 295 310 325 341 358 6.0%
Total Operating Expense 1,786 1,733 1,731 1,757 1,809 1,855 0.8%
Net Operating Income Before Depreciation (1,062) (923) (902) (910) (945) (971) -1.8%
Total Depreciation Expense 221 209
Net Operating Income After Depreciation $ (1,284) $ (1,131)
Total
2012-2016
COMMITTED CAPITAL BUDGET $0 $0 $0 $0 $0 $0 $0
edbpfor.xls
Notes:
1) Consists of remaining Corporate costs to be allocated to Lines of Business after direct charges have been coded to LOB's
and Divisions or other costs allocated to Divisions. Most costs are allocated using a formula based on Expenses and
employees. For some departments specific allocation methodologies, such as employees for Human
Resources & Development, are used.
VI-19
Port of Seattle 2012 Preliminary Budget
MARINE MAINTENANCE
MISSION
The mission of the Marine Maintenance Department is to maintain, preserve, upgrade, improve and enhance,
as directed, the assets owned by the Real Estate and Seaport Divisions. We conduct our activities in a manner
that fosters competitive business practices, customer service and benefit to the public and local businesses, as
well as environmental responsibility and conservation.
DESCRIPTION
Maintenance disciplines include automotive, carpentry, marine carpentry, electrical, general labor, custodial
labor, landscape labor, painting, plumbing, sprinkler-fitting (fire protection), sheetmetal, welding, truck
driving sign writing, HVAC maintenance and elevator/escalator maintenance. Most maintenance activities
required by Port assets are available through the Marine Maintenance Shop, as are public works including
small capital construction services and environmental and safety compliance support activities.
BUSINESS STRATEGY
Our business strategy is to fulfill the maintenance needs of our customers while acting as stewards of the assets
in the public trust.
We conduct Preventive Maintenance and Corrective Maintenance to properly safeguard Port assets;
We engage in expense and capital improvements to support customer departments' business strategies;
We fully support the Port's business, community and environmental strategies with programs focused
on Economics, Equity - Social Responsibility, Environment, and Employee Engagement.
KEY STRATEGIES AND OBJECTIVES
STRATEGY: ENSURE DIVISION AND MARINE MAINTENANCE GROUP VITALITY
Key Objective: Maximize financial performance
Performance Measure: Budget and performance targets met.
Performance Objective Performance Target Task/Activity/Program/Initiative
Meet Authorized Budget +/- 2% Dept. financial health.
Reduce Trouble Calls/ 15% Increase Preventative Maintenance
Urgent Maintenance 15% Reduce Trouble Calls.
Eliminate Deferred Small Project List Continue Deferred Maintenance reduction plan.
Maintenance Backlog Completed
Commission Actions
Initiated for All 2011-
12 Large Projects
VI-20
Port of Seattle 2012 Preliminary Budget
STRATEGY: DEVELOP NEW ECONOMIC OPPORTUNITY FOR THE REGION AND THE PORT
Key Objective: Build relationships and partnerships to develop new business opportunities for the Port and
local businesses to compete in the global economy
Performance Measure: Use resources, such as Office of Social Responsibility, to engage with local, small
and disadvantaged businesses to meet department and Port goals.
Performance Objective Performance Target Task/Activity/Program/Initiative
Utilize small businesses 15% of operating and Utilize qualified small businesses to provide
capital expenditures consulting and contracting services.
Purchase materials from small business vendors
when possible and economically feasible.
STRATEGY: EXHIBIT ENVIRONMENTAL STEWARDSHIP THROUGH OUR ACTIONS
Key Objective: Integrate environmental and business objectives into our organization
Performance Measure: Compliance with existing programs and initiation of new endeavors related to the
Cleanest, Greenest, Most Cost-effective Port programs.
Performance Objective Performance Target Task/Activity/Program/Initiative
Ensure efficient Maintain reduced tonnage Zero increase in landfill waste from shop.
collection & disposal of of landfill waste and
garbage & ensure increased tonnage of
recycling recyclables.
Comply with 100% Compliance Implement and enforce Storm Water Pollution
environmental Prevention Plan Best Management Practices.
regulations in the conduct Train 100% of available staff and craftspeople
of our activities. in annual safety training day.
Communicate regulatory changes during
monthly safety meetings.
Maintain EnviroStar and Certification is renewed at Ensure EnviroStars Compliance.
Salmon Safe Certification all facilities Ensure Salmon Safe Compliance.
Track and reduce travel 10% reduction in travel Participate in POS initiatives related to clean air
miles by Marine miles and sustainability.
Maintenance vehicles Measure effectiveness of direct reporting to
north-end office.
VI-21
Port of Seattle 2012 Preliminary Budget
STRATEGY: BE A HIGH PERFORMANCE ORGANIZATION
Key Objective: Attract and retain valuable employees and provide a culture of clear expectations and
accountability
Performance Measure: Employee participation in diversity events, training and performance planning and
appraisal.
Performance Objective Performance Target Task/Activity/Program/Initiative
Comply with safety 100% Compliance Train 100% of available staff and craftspeople
regulations. in annual safety training day.
Communicate regulatory changes quarterly
through input to the Health and Safety
Management Report and monthly safety
meetings.
Achieve 90% on Marine Maintenance Safety
Evaluation Status performance measures.
Maintain educated 90% of staff Staff members will attend or participate in one
employee workforce. diversity activity per year.
30% of staff Staff members will attend at least one local
class, seminar or conference each year.
100% of staff Each non-represented employee will include a
personal development plan in PREP.
100% of staff All employees will comply with Workplace
Responsibility initiatives and Code of Conduct.
STRATEGY: BE A LEADER IN TRANSPORTATION SECURITY
Key Objective: Reinforce and coordinate security and public safety programs for all port assets
Performance Objective Performance Target Task/Activity/Program/Initiative
Report and track boat 100% of boat work and Report to site contacts and Coast Guard as
work and under dock under dock work appropriate when workers are working in the
work boats, under docks and traveling from one
waterfront location to another.
Tabletop Exercise One per year Assist Seaport Emergency Manager with the
planning and execution of the tabletop exercise.
VI-22
Port of Seattle 2012 Preliminary Budget
PIER 69 FACILITIES MANAGEMENT
MISSION
To provide, operate and maintain a safe, secure, comfortable, productive and efficient workplace.
DESCRIPTION
The department provides facilities management services for Pier 69 site including:
Space management and planning
Energy management
Management and operation of print shop
Management and operation of mailroom, messenger, and shipping/ receiving
Management and operation of conference center, commission chambers, and atrium meeting spaces
Management and operation of motor pool
Management of Portside Caf lease
Representation of Real Estate Division on the Safety & Security Coordination Council
Administration of Commute Trip Reduction (CTR) program
Administration of access control and surveillance systems.
SERVICE STRATEGY
Hire, develop, and retain high performing, service oriented personnel;
Operate and maintain headquarter facilities with emphasis on continuous improvement, outstanding
customer service, optimal staffing levels, environmental stewardship, and proactive maintenance;
Partner effectively with Port maintenance departments;
Partner effectively with outsourced service providers, e.g., HVAC maintenance, elevator maintenance,
janitorial services, and building security services;
Effectively represent the interests of the Real Estate Division on the POS Safety & Security
Coordination Council.
KEY STRATEGIES AND OBJECTIVES
STRATEGY: ENSURE DIVISION AND PIER 69 FACILITY MANAGEMENT GROUP VITALITY
Key Objective: Maximize financial performance
Performance Objective Performance Target Task/Activity/Program/Initiative
Manage within within 5% of approved Review performance monthly for variance and
authorized budget budget make adjustments to spending if necessary.
Maintain print shop > or = 75% Maintain optimal staffing level; continue focus
chargeback percentage on customer service and quality assurance.
VI-23
Port of Seattle 2012 Preliminary Budget
STRATEGY: DEVELOP NEW ECONOMIC OPPORTUNITY FOR THE REGION AND THE PORT
Key Objective: Build relationships and partnerships to develop new business opportunities for the Port and
local businesses to compete in the global economy
Performance Objective Performance Target Task/Activity/Program/Initiative
Success of Portside Caf Revenue from rent is > Provide responsive landlord support for tenant
minimum guarantee in accord with lease agreement.
Utilize small businesses 10% of operating and Where feasible, utilize qualified small
capital expenditures businesses.
STRATEGY: EXHIBIT ENVIRONMENTAL STEWARDSHIP THROUGH OUR ACTIONS
Key Objective: Strive to integrate environmental and business objectives into our organization
Performance Objective Performance Target Task/Activity/Program/Initiative
Maintain or reduce Electrical consumption is Monitor and maintain building systems to
electrical consumption within 5% of 2011 ensure that system components operate as
designed. Continue to look for opportunities to
reduce electrical consumption.
STRATEGY: BE A HIGH PERFORMANCE ORGANIZATION
Key Objective: Attract and retain valuable employees and provide a culture of clear expectations and
accountability
Performance Objective Performance Target Task/Activity/Program/Initiative
All staff participate in 100% staff participation Each staff member will identify at least one
professional development development goal in their PREP plan.
All staff participate in all 100% of training is All training as listed in LMS is either completed
required training completed or scheduled or scheduled.
STRATEGY: BE A LEADER IN TRANSPORTATION SECURITY
Key Objective: Reinforce and coordinate security and public safety programs for all port assets
Performance Objective Performance Target Task/Activity/Program/Initiative
Maintain and update P69 annual and periodic updates Plan is updated annually. Periodic updates
FM COOP document (contact information, etc.) are done throughout
the year.
Participate in the Set by Safety & Security Participate in the planning and execution of
planning and execution of Coordination Council tests.
communication tests
Participate in tabletop Set by Safety & Security Participate in the planning and execution of
exercises Coordination Council tabletop exercises.
VI-24
Port of Seattle 2012 Preliminary Budget
D. REAL ESTATE OPERATING BUDGET SUMMARY
TABLE VI-7: REVENUE BY ACCOUNT
($ in 000's) % Change
2010 2011 2012 2012 Bud -
REVENUE BY ACCOUNT Notes Actual Budget Budget 2011 Bud
Operating Revenue
Dckg, Whrfg, Serv/Facility, Passenger Fee $ 58 $ 58 $ 62 6.9%
Equipment Rental 74 79 78 -1.3%
Berthage & Moorage 9,901 9,881 10,005 1.3%
Parking Revenue 146 150 152 1.3%
Revenue From Sale of Utilities 1,157 1,117 1,287 15.2%
Property Rental Revenue 9,381 9,837 10,139 3.1%
Other Revenues 9,674 9,820 11,107 13.1%
Total Operating Revenue $ 30,391 $ 30,942 $ 32,828 6.1%
EDbud.xls REdata
FIGURE VI-3: REAL ESTATE DIVISION REVENUE BY ACCOUNT
($ in 000's)
Dckg, Whrfg, Serv/Facility,
Passenger Fee Equipment Rental
0.2% 0.2%
Berthage & Moorage
Other Revenues
30.5%
33.8%
Parking
Property Rental Revenue
Revenue
30.9%
0.5%
Revenue From Sale of
Utilities
3.9%
Total Revenue: $32,828
VI-25
Port of Seattle 2012 Preliminary Budget
TABLE VI-8: OPERATING & MAINTENANCE EXPENSES BY ACCOUNT
($ in 000's) % Change
2010 2011 2012 2012 Bud -
EXPENSE BY ACCOUNT Notes Actual Budget Budget 2011 Bud
Salaries, Wages, Benefits & Workers Comp $ 16,055 $ 18,138 $ 19,594 8.0%
Equipment Expense 999 894 1,411 57.8%
Utilities 3,286 3,237 3,627 12.0%
Supplies & Stock 1,199 1,288 1,336 3.7%
Outside Services 2,366 3,082 3,705 20.2%
Travel & Other Employee Expenses 87 161 197 22.4%
Promotional Expenses 27 43 47 9.3%
Other Expenses 8,297 8,293 8,543 3.0%
Total O&M without Environmental 32,316 35,136 38,460 9.5%
Environmental Expense (2) 0 0 0.0%
Total O&M with Environmental 32,314 35,136 38,460 9.5%
Charges to Capital Projects (1,579) (1,400) (2,044) 46.0%
Total Operating Expense $ 30,735 $ 33,736 $ 36,416 7.9%
EDbud.xls REdata
FIGURE VI-4: REAL ESTATE DIVISION EXPENSE BY ACCOUNT
($ in 000's)
Travel & Other Employee
Expenses
0.5% Other Expenses
22.2%
Promotional Expenses Salaries, Wages, Benefits &
0.1% Outside Services
Workers Comp
9.6%
50.9%
Utilities
9%
Supplies & Stock
3.5%
Equipment Expense
2% Total Before Charges to Capital Projects: $38,460
Charges to Capital Projects: $2,044
Total Expense: $36,416
VI-26
Port of Seattle 2012 Preliminary Budget
TABLE VI-9: REAL ESTATE REVENUE AND EXPENSE BY DEPARTMENT
(in 000's) % Change
2010 2011 2012 2012 Bud -
BY DEPARTMENT Notes Actual Budget Budget 2011 Bud
REVENUE
Harbor Services $ 11,533 $ 11,448 $ 11,633 1.6%
Portfolio Management 17,150 18,373 19,820 7.9%
Real Estate Development and Planning 756 724 812 12.1%
Eastside Rail Corridor 114 45 22 -50.8%
Pier 69 Facilities Management 76 3 1 -66.7%
Marine Maintenance 763 349 540 55%
Total Operating Revenue 30,391 30,942 32,828 6.1%
EXPENSES BEFORE CHARGES TO CAPITAL , NON-OPS, & ENV
Business Groups:
Harbor Services 4,437 4,454 4,614 3.6%
Portfolio Management 1 10,985 11,949 12,441 4.1%
Real Estate Development and Planning 692 759 799 5.3%
Eastside Rail Corridor 504 484 203 -58.1%
Total Business Group Expense 16,617 17,645 18,057 2.3%
Service Groups and Other:
Pier 69 Facilities Management 1,510 1,453 1,521 4.7%
Marine Maintenance 13,772 15,679 18,503 18.0%
Real Estate Administration 346 358 378 5.6%
Contingency - - -
Environmental Remediation Liability Expense (2) - -
Real Estate Capital to Expense 70 - -
Total Services Group and Other Expense 15,697 17,491 20,403 16.7%
Total Expenses Before Charges to Capital, Non-Ops, & Env Remed 32,314 35,136 38,460 9.5%
CHARGES TO CAPITAL, NON-OPS, & ENV REMEDIATION (1,579) (1,400) (2,044) 46.0%
OPERATING & MAINTENANCE EXPENSE
Business Groups:
Harbor Services 4,436 4,454 4,614 3.6%
Portfolio Management 1 10,985 11,949 12,441 4.1%
Real Estate Development and Planning 692 759 799 5.3%
Eastside Rail Corridor 504 484 203 -58.1%
Total Business Group Expense 16,616 17,645 18,057 2.3%
Service Groups and Other:
Pier 69 Facilities Management 1,510 1,453 1,521 4.7%
Marine Maintenance 12,142 14,279 16,459 15.3%
Real Estate Administration 346 358 378 5.6%
Contingency - - -
Environmental Remediation Liability Expense (2) - -
Real Estate Capital to Expense 121 - -
Total Services Group and Other Expense 14,118 16,091 18,359 14.1%
Total Operating Expense $ 30,735 $ 33,736 $ 36,416 7.9%
Notes:
1) Terminal 117 was transferred from Seaport to Real Estate for 2012 Budget.
VI-27
Port of Seattle 2012 Preliminary Budget
E. STAFFING
The following table outlines the Full-Time equivalents (FTEs) for both regular and other categories in the Real
Estate Division. The division is budgeting 165.8 FTE's for 2012, one FTE higher than 2011 budget.
TABLE VI-10: REAL ESTATE DIVISION STAFFING
STAFFING
(Full-Time Equivalent Positions) % Change
2010 2011 2011 2012 2012 Bud -
BY DEPARTMENT Notes Actual Budget Est. Act. Budget 2011 Bud
Real Estate Administration 2.0 2.0 2.0 2.0 0.0%
Harbor Services 31.8 30.8 30.8 30.8 0.0%
P69 Facilities Management 8.0 8.0 8.0 8.0 0.0%
Development and Planning 2.0 2.0 2.0 3.0 50.0%
Portfolio Management 13.0 14.0 14.0 14.0 0.0%
Marine Maintenance 108.0 108.0 108.0 108.0 0.0%
TOTAL REAL ESTATE DIVISION 164.8 164.8 164.8 165.8 0.6%
FTE.XLS
VI-28
Port of Seattle 2012 Preliminary Budget
F. REAL ESATE DEVELOPMENT CAPITAL BUDGET
TABLE VI-11: REAL ESTATE DIVISION CAPITAL BUDGET SUMMARY
($ in 000's) 2012 2012-2016 % of 2012 Total
Budget CIP Committed
Committed Capital Projects
General Real Estate $6,044 $14,208 55.3%
Harbor Services 0 0 0.0%
Portfolio Management 4,880 7,117 44.7%
Total Committed $10,924 $21,325 100.0%
Business Plan Prospective Projects $3,600 $32,706
Total CIP $14,524 $54,031
capsum.xls
FIGURE VI-5: REAL ESTATE DIVISION COMMITTED CAPITAL BUDGET
($ in 000's)
Committed CIP Total Spending: $10,924
Portfolio Management
44.7%
General Real Estate
55.3%
VI-29
Port of Seattle 2012 Preliminary Budget
CAPITAL DEVELOPMENT DIVISION
A. 2012 BUDGET SUMMARY
TABLE VII-1: 2012 BUDGET SUMMARY
($ in 000's) Change
2010 2011 2012 2012 Bud-
OPERATING RESULTS Notes Actual Budget Budget 2011 Bud % Change
Operating Expense $ 9,335 $ 14,278 $ 15,516 $ 1,238 8.7%
Total Operating Expense $ 9,335 $ 14,278 $ 15,516 $ 1,238 8.7%
COMMITTED CAPITAL BUDGET 1 N/A $ 523 $ 398 $ (125) -23.9%
EMPLOYMENT (TOTAL FTEs) 268.0 262.5 255.8 (6.8) -2.6%
CAPDEVSUM.XLS
Notes:
1) Capital Development Division had no capital budget for 2010. See Section X for details of Capital Budget.
B. DIVISION MISSION STATEMENT
Mission: The Capital Development Division (CDD) delivers projects and provides technical and contracting
services in support of the business plans and infrastructure needs of the Port of Seattle.
Vision: The CDD is a service provider to the business divisions of the Port, attuned to their needs and
priorities. As Port employees we are public servants, conscious of our obligations to policy objectives for
jobs creation, environmental protection and social responsibility and committed to openness and
accountability for all our actions. We strive to employ the best available technology and most efficient
business practices. Our employees are critical to short and long-term success of the organization.
Goals:
Deliver projects to operating division customers on time, within budget, meeting agreed scope, and
with minimal and mutually-agreed impacts on operations
Support divisions beyond projects: including budget plan development; business planning; asset
management and reporting; community outreach; negotiations; and technical support and assistance.
Provide contracting services.
Provide emergency preparedness.
Develop the talent, capabilities, motivation and well-being of CDD employees.
Continue to provide a proactive safety program internally to the Port and externally with the
contracting community.
Strategies & Initiatives:
Objective: Establish Skire Unifier as our Project Delivery System (PDS).
Strategy: Finalize system, conduct training and place designated projects on the new PDS.
filename: CapDevBud.doc
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Supported Port-wide Strategy: Be a high performance organization.
Objective: Support the business divisions in implementing sustainable asset management.
Strategy: Provide expertise and suggestions to sustainability initiatives at airport, seaport and real estate.
Improve procedures for consistently identifying sustainability opportunities in new projects. Lead
publication of revised EX-15 procedures.
Supported Port-wide Strategy: Exhibit environmental leadership through our actions.
Objective: Streamline the formation and administration of service agreement contracts.
Strategy: Partner with customers to improve service agreement timeliness. Use LEAN analysis to identify
opportunities for improving efficiency. Revise procedures to reduce time and effort.
Supported Port-wide Strategy: Develop new business and economic opportunities for the region and the
Port.
Objective: Update Port standard specifications for construction projects.
Strategy: Revise contract terms and conditions in cooperation with Legal and Association of General
Contractors. Assign responsibilities and develop a system for continuous update of technical specifications.
Supported Port-wide Strategy: Develop new business and economic opportunities for the region and the
Port.
Objective: Optimize SharePoint in CDD.
Strategy: Enhance consistency, accessibility and staff expertise to improve SharePoint as CDD's system for
team collaboration, document management, work flow and procedure standardization.
Supported Port-wide Strategy: Be a high performance organization.
Objective: Improve Emergency Response readiness.
Strategy: Support Port-wide initiatives flowing from the April 2011 FEMA exercise and strengthen CDD
capabilities such as damage assessment and emergency contracting.
Supported Port-wide Strategy: Ensure airport and seaport vitality.
C. KEY RESPONSIBILITIES & SERVICES
OVERVIEW:
The three operating divisions of the Port are supported by the CDD based on level of project and contracting
services required to support their operations and capital & expense project needs. The services by the
departments within the division are demand driven.
The major responsibilities and goals for the Capital Development departments in 2012 are:
AVIATION PROJECT MANAGEMENT GROUP:
Key Responsibilities & Services:
o Deliver capital & expense projects for Aviation Division on time, within budget, meeting
agreed scope, and with minimal and mutually-agreed impacts on airport operations.
o Ensure that procurement meets requirements of State law, Port policies & procedures,
federal grants, and other controlling regulations.
o Assist Aviation Division in initial project scoping, cost estimation, and development of
project alternatives.
filename: CapDevBud.doc
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Port of Seattle 2012 Preliminary Budget
Key Goals or Key Department's Drivers/Strategy:
o Complete Rental Car Facility and associated projects (main terminal improvements, bus
maintenance facility, offsite roads) for startup in the spring of 2012.
o Design/construct multiple projects in and around terminal while minimizing operational
impact & ensuring high level of project & Aviation Division coordination.
o Maintain progress on midterm solutions to FIS congestion in South Satellite.
o Deliver airline/gate realignment projects.
o Complete design of power supply system for electric ground support equipment for
concourses C & D & North Satellite, purchase rolling stock (assumes airline consortium
agreement executed & critical mass of airlines participate).
o Continue construction of pre-conditioned air project.
o Continue construction of escalator renewal/replacement project.
o Complete construction of 2012 airfield pavement replacement.
o Complete design and begin construction of south satellite HVAC, ceiling and lighting
replacement.
o Complete design and begin construction of replacement elevators.
o Complete construction and installation of parking garage revenue control system
replacement.
o Complete design and begin construction of fire station upgrades.
o Work with Aviation Division and Alaska Airlines on North Satellite and C concourse
terminal and infrastructure improvement plans.
o Complete analysis of airfield pavement "popouts".
o Complete demolition of USPS & former Alaska warehouse buildings.
o Begin construction of CTE freight elevator.
o Begin construction of gate utility improvements.
CENTRAL PROCUREMENT OFFICE:
Key Responsibilities & Services:
o Manage the procurement process for all construction contracts, professional and personal
service contracts over $200,000, and goods and service contracts to ensure compliance with
legal mandates.
o For personal and professional service contracts with a value between $50,000 and $200,000
provide process reviews at key points in the procurement process to ensure compliance.
o For personal and professional service contracts with a value procurements less than $50,000
perform compliance reviews on department's procurement processes to ensure that the
departments are complying with the Port's policies and procedures and legal mandates
related to such procurements.
o Review construction change orders to ensure compliance with contract provisions, adequate
content and procedural compliance; execute change orders.
o Review service agreement amendments and service directives to ensure compliance with
contract provisions. Assist in drafting amendments when appropriate.
o Draft amendments for goods and service contracts.
o Close out construction contracts, ensuring that all closing submittals have been received.
o Close bid escrow documents accounts, returning documents to the bidder.
o Close out personal services and goods and services contracts.
o Provide notification to Commission, with respect to public works contracting, as required to
be in compliance with state law and Resolution 3605.
o Dispose of Personal Property as required under PUR-1 pursuant to the requirements of
RCW 53.08.090 or RCW 39.33.010.
o Provide outreach and work with Office of Social Responsibility in developing appropriate
small business programs and opportunities.
o Provide advice and assistance for the administration of all Port contracts.
filename: CapDevBud.doc
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Port of Seattle 2012 Preliminary Budget
Key Goals or Key Department's Drivers/Strategy:
o Annual report on P-Card use. Identify how the program is functioning, potential changes,
and determine if it is appropriate to increase the single transaction dollar threshold.
o Seek changes to Resolution 3166 to remove unnecessary paperwork and simplify the
procurement process.
ENGINEERING:
Key Responsibilities & Services:
In-house project Design and technical support.
o Civil/Structural and Mechanical/Electrical design, analysis and CAD drafting.
o Central repository for all project drawings, as-built and soils information.
o Maintain technical master specifications.
o Quality Assurance/Quality Control/Quality review.
Construction Management for all major construction projects and tenant construction
oversight.
o Field observation/inspection and quality compliance checks.
o Change order management, disputes and claims resolution.
o Constructability reviews.
o Construction coordination with Port operations/tenants.
o Construction document management through LiveLink system.
Construction safety compliance for all construction projects and provides orientation
training.
Surveying and Mapping of all Port properties.
o Topographic and hydrographic surveys.
o Legal descriptions and lease line layouts.
o Utility locates/mapping and aerial mapping
o GIS data gathering.
o BIM survey data.
o Administrative Support.
o Purchase of supplies and equipment.
o HCM time management and process of personnel actions.
Asset Administration of Engineering assets.
o Engineering fleet management, equipment and logistics support.
o Budget preparation, monitoring and reporting.
Emergency Response and Declaration of Emergency Support.
Key Goals or Key Department's Drivers/Strategy:
o Continue participation and provided leadership in the Capital Projects Advisory Review
Board (CPARB) legislative committee and sub-committees for government agencies
contracting laws and procedures. Bob Maruska is the Chair for CPARB and Janice Zahn
participates with the sub-committee on contracting methods.
o Continue regular meetings with Association of General Contractors (AGC) and contractor
representatives to review and discuss opportunities to provide greater understanding and
efficiency in bidding, award and construction of projects to benefit the Port and reduce
unnecessary claims.
o Continue meetings as required with Association of Consulting Engineers Council for
Washington (ACEC) to review and discuss issues and concerns to provide better
understanding of risks and liabilities for the Port and for the consulting community.
filename: CapDevBud.doc
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Port of Seattle 2012 Preliminary Budget
o Continue expanded training of key CDD staff for better Emergency Response capabilities.
This included training in FEMA courses to better prepare staff to function within the
standard operating procedures of the national emergency response community.
o Meet with representatives of the Pilots Association, EOC and NOAA to discuss issues and
concerns with hydrographic surveys and metrics. Garry Ensley is the point of contact for the
Port.
o Complete the Rental Car Facility and Bus Maintenance Facility in Spring 2012.
o Complete the new escalators per established completion dates in 2012.
o Complete construction to provide preconditioned air to select gates per established
completion dates in 2012.
PORT CONSTRUCTION SERVICES:
Key Responsibilities & Services:
o Provide construction and construction management services to the operating divisions in the
most cost effective manner possible.
o The Regulated Materials Management Program (RMM) supports construction by performing
necessary and required regulated building material surveys prior to construction.
o Provide on-call emergency response.
Key Goals or Key Department's Drivers/Strategy:
o Safety First-Provide a safe working environment for all Port of Seattle personnel, consultant
service providers and construction contractors.
o High Performance Organization-PCS will maintain and continue to meet the goals outlined
in the CDD Performance Metrics. PCS will remain compliant with all Workplace
Responsibility and Central Procurement Office policy and procedures.
o Public-Private Partnerships-Working in collaboration with the Office of Social
Responsibility, PCS will support the private contracting community by providing small
works contracting opportunities whenever feasible and cost effective.
SEAPORT PROJECT MANAGEMENT GROUP:
Key Responsibilities & Services:
o Capital project delivery.
o Expense project delivery.
o Provide support to Seaport and Real Estate Divisions.
o Provide support to the Capital Development Division.
o Emergency response preparedness.
o Safety.
o Department administrative functions.
Key Goals or Key Department's Drivers/Strategy:
o Complete Bell Harbor Lighting Control Upgrade design & begin construction.
o T-86 Grain Facility Modernization.
o P-69 North Apron Cathodic Protection.
o P-91 C-175 Roof Replacement.
o Complete T-18 Fender Replacement (Phase II).
o P-69 Built-up Roof Replacement.
o Complete RFID Truck Program.
o Complete T-91 Waterline Replacement.
o Complete T-91 Cruise Fender project.
o Complete design for T-117 Restoration.
o Complete design and prepare bid package for T-117 Clean Up.
filename: CapDevBud.doc
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Port of Seattle 2012 Preliminary Budget
o Complete street vacations at T-105 and T-18 and begin work on T-5 and T-30 Alaskan Way
South.
o Begin work on T-5 Maintenance Dredging Phase II.
o Award and complete T-18 Pile Cap Pilot Project.
o Complete FT Net Shed Code Compliance Improvements.
o Complete FT C-15 Building East Sewer Line Replacement.
o Complete FT C-15 Building Subsidence Analysis.
o Complete FT Net Shed 9 Roof Replacement.
o Complete FT West Wall North Fender System Replacement Design.
KEY PERFORMANCE INDICATORS/MEASURES:
1. Construction Project Soft Costs: Limit construction soft costs (design, construction management, project
management, environmental documentation, allocated overhead) to no more than 25% of total capital
and major expense project costs.
2. Cost Growth During Construction: Limit average major construction contract cost growth to 10% of
award amount.
3. Project Schedule: Limit time growth from initial Commission capital or expense project authorization to
construction contract award to no more than 10% of originally scheduled and then from award to
substantially complete to no more than 10% of originally scheduled.
4. Small Business Participation: 60% of small works contracts; 8% of major construction contracts; 5% of
service agreements and 10% of purchases, per SBA size standards.
5. Customer Score Card: 100% of projects surveyed. Average 85% of total possible points on project
customer feedback scorecards returned.
6. Environmental: Incorporate Executive Policy and Procedure 15 (Sustainable Asset Management) and/or
LEED process in every project.
7. Safety: Score an average of 90 out of a possible 100 points on CDD organizational Safety Program
Evaluations. Limit annual contractor workplace injury rates to 6 recordable accidents and 2 time lost
accidents per 200,000 hours worked.
8. Performance Evaluation timeliness: Complete and submit 98% of performance reviews by 30 days after
end of rating period.
9. Procurement Timeliness: Improve average time to award and accomplish contract awards within agreed
timeframes.
filename: CapDevBud.doc
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Port of Seattle 2012 Preliminary Budget
D. CAPITAL DEVELOPMENT DIVISION BUDGET SUMMARY
The following Tables VII-2 & VII-3 and Figures VII-1 & VII-2 illustrate the expenses for Capital
Development Division by department and by account:
TABLE VII-2: CAPITAL DEVELOPMENT EXPENSE BY DEPARTMENT
($ in 000's) % Change
2010 2011 2012 2012 Bud-
BY DEPARTMENT Notes Actual Budget Budget 2011 Bud
EXPENSES BEFORE CHARGES TO CAPITAL, NON-OPS & ENV
Capital Development Administration $ 380 $ 359 $ 374 4.4%
Central Procurement Office 3,287 4,394 4,481 2.0%
Engineering 9,963 15,225 14,217 -6.6%
Port Construction Services 7,886 7,554 6,791 -10.1%
Project Management Group - Aviation 5,134 8,637 7,731 -10.5%
Project Management Group - Seaport 2,693 2,493 2,987 19.8%
Total Expenses Before Charges to Capital, Non-Ops & Env 29,343 38,662 36,581 -5.4%
CHARGES TO CAPITAL, NON-OPS, & ENV REMEDIATION (20,007) (24,384) (21,066) -13.6%
OPERATING & MAINTENANCE EXPENSE
Capital Development Administration 380 359 374 4.4%
Central Procurement Office 1,780 3,180 3,151 -0.9%
Engineering 1,391 4,333 4,460 2.9%
Port Construction Services 3,888 3,216 3,479 8.2%
Project Management Group - Aviation 1,143 2,299 2,502 8.8%
Project Management Group - Seaport 754 891 1,550 73.9%
Total Operating Expenses $ 9,335 $ 14,278 $ 15,516 8.7%
capdevbud.xls
FIGURE VII-1: CAPITAL DEVELOPMENT EXPENSE BY DEPARTMENT
($ in 000's)
Project Management Capital Development
Group - Seaport Administration
10.0% 2.4%
Central Procurement
Project Management Office
Group - Aviation 20.3%
16.1%
Port Construction Services Engineering
22.4% 28.7%
Total Expense: $15,516
filename: CapDevBud.doc
updated: 10/18/2011 VII-7
Port of Seattle 2012 Preliminary Budget
TABLE VII-3: REVENUES AND EXPENSES BY ACCOUNT
($ in 000's) % Change
2010 2011 2012 2012 Bud-
BY ACCOUNT Notes Actual Budget Budget 2011 Bud
Revenue
Other Revenue $ 36 $ - $ - 0.0%
Total Revenue 36 - - 0.0%
Expense
Salaries, Wages, Benefits & Workers Compensation 23,171 28,545 29,589 3.7%
Equipment Expense 384 401 680 69.6%
Utilities 31 56 70 25.0%
Supplies & Stock 191 295 293 -0.7%
Outside Services 3,443 7,768 5,215 -32.9%
Travel & Other Employee Expenses 230 440 434 -1.4%
Promotional Expenses 0 1 2 100.0%
Other 1,892 1,155 298 -74.2%
Total O&M 29,343 38,662 36,581 -5.4%
Charges to Capital Projects (20,007) (24,384) (21,066) -13.6%
Total Expense $ 9,335 $ 14,278 $ 15,516 8.7%
capdevbud.xls
FIGURE VII-2: CAPITAL DEVELOPMENT EXPENSE BY ACCOUNT
($ in 000's)
Promotional Expenses
Travel & Other 0%
Employee Expenses
Supplies & Stock Other
1.2%
0.8% 0.8%
Utilities
0.2% Outside Services
Equipment Expense 14.3%
1.9%
Salaries, Wages, Benefits
& Workers
Compensation
80.9%
Total Before Charges to Capital Projects: $36,581
Charges to Capital Projects: $21,066
Total Expense: $15,516
filename: CapDevBud.doc
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E. STAFFING
The following TABLE VII-4 depicts the proposed staffing requirements for 2012 by department for the
Capital Development Division: Capital Development is budgeting 255.8 positions, which is 6.7, lower than
2011 budget.
TABLE VII-4: CAPITAL DEVELOPMENT DIVISION STAFFING
STAFFING
(Full-Time Equivalent Positions) % Change
2010 2011 2011 2012 2012 Bud -
BY DEPARTMENT Notes Actual Budget Est. Act. Budget 2011 Bud
Capital Development Administration 2.0 2.0 2.0 2.0 0.0%
Central Procurement Office 37.0 37.0 37.0 37.0 0.0%
Engineering 110.5 110.5 110.5 108.8 -1.6%
Port Construction Services 54.0 54.0 54.0 47.0 -13.0%
Aviation Project Management 45.0 42.0 44.0 44.0 4.8%
Seaport Project Management 19.5 17.0 17.0 17.0 0.0%
TOTAL CAPITAL DIVISION 268.0 262.5 264.5 255.8 -2.6%
FTE.XLS
F. CAPITAL BUDGET
Please see Corporate section, VIII F, for Captial Development Capital Budget information.
G. CAPITAL DEVELOPMENT DIVISION SUMMARY
TABLE VII-5: C APITAL DEVELOPMENT DIVISION SUMMARY
($ in 000's) 2011 Growth
Actual Budget 2012 Bud-
Budget Forecast
OPERATING BUDGET Notes 2010 2012 2011 Bud
Operating Revenue $ 36 $ - $ - $ - NA
Operating Expense 9,335 14,278 14,278 15,516 8.7%
Total Operating Expense 9,335 14,278 14,278 15,516 8.7%
Income from Operations $ (9,299) $ (14,278) $ (14,278) $ (15,516) 8.7%
CAPITAL SPENDING 1 $ - $ 523 $ 523 $ 398 -23.9%
TOTAL FTEs 268.0 262.5 264.5 255.8 -2.6%
capdevhist.xls
Notes:
1) Capital Development Division had no capital budget for 2010. See Table VIII-5, Corporate section for
total capital growth for 2012-2016. See Section X for details of Capital Budget.
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CORPORATE
A. 2012 BUDGET SUMMARY
TABLE VIII-1: 2012 BUDGET SUMMARY
($ in 000's) Change % Change
2011 2012 2012 Bud- 2012 Bud-
OPERATING RESULTS Notes Budget Budget 2011 Bud 2011 Bud
Other Revenue $ 1,025 $ 151 $ (874) -85.3%
Total Revenue 1,025 151 (874) -85.3%
Corporate 75,008 76,535 1,527 2.0%
Total Corporate Expense 75,008 76,535 1,527 2.0%
Excess of Revenue over Expense $ (73,983) $ (76,384) $ (2,401) 3.2%
COMMITTED CAPITAL BUDGET 1 $ 11,549 $ 11,524 $ (25) -0.2%
EMPLOYMENT (TOTAL FTEs) 447.6 452.2 4.6 1.0%
admsum.xls
Notes:
1) See Section X for details of Capital Budget.
B. MISSION STATEMENT
Corporate will provide high quality and cost-effective professional and technical services to the operating
divisions and support the overall goals of the Port.
C. KEY RESPONSIBILITIES & SERVICES
OVERVIEW:
The three operating divisions of the Port are supported by a number of functional departments as well as service
groups. These functional and service groups allocate their expenses according to the level of service they
provide to the divisions.
Many of the Corporate departments are vital to the success of the operating divisions for providing essential
services such as accounting, legal services, computer support, etc. Their services also benefit the public in
general and play an indirect role in the success of the operating divisions.
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The major initiatives and service plans for the Corporate departments in 2012 are:
COMMISSION:
Set and support CEO performance goals and objectives. These include policy goals and objectives related to
achieving the Port"s financial and budgetary annual performance, and aligning budget priorities to the Port"s core
mission; division goals and objectives that demonstrate the CEO is holding his direct reporting managers
accountable for division-level performance; and other goals and objectives related CEO-identified "stretch
goals" for achieving the stated vision of being the "cleanest, greenest, most energy-efficient port in the nation,"
as well as other CEO initiatives that require leadership engagement with the Commission (e.g., Century Agenda
activities and federal legislative efforts).
Key Goals:
o Achieve the stated vision of being the "cleanest, greenest, most energy-efficient port in the
nation."
o Develop key partnerships with customers, regulators and environmental groups.
o Provide administration for Commission meetings and the formal record of Commission actions.
EXECUTIVE:
Achieve 2012 operating and performance goals and objectives set by the Commission. Oversee the achievement
of all divisions" major goals and initiatives. Complete or maintain major infrastructure initiatives for 2011 by
investing in capital projects that facilitate freight mobility and protect the Working Waterfront and support job
creation. Continue to support an ambitious environmental agenda.
Key Goals:
o Oversee the achievement of all divisions" major goals and initiatives.
o Achieve budgeted net operating income before depreciation.
o Complete resale of Eastside Corridor.
o Develop plan for financing POS contribution to Viaduct Replacement and Lower Duwamish
Waterway clean-up
o Continue to develop plan and start implementation of real estate portfolio realignment to achieve
breakeven.
o Continue social responsibility efforts to increase participation by local disadvantaged businesses.
o Complete the Part 150 Noise and Land-Use Compatibility Study and community engagement
process.
o Identify priority projects for each division in the five-year plan.
o Maintain fundamental self-sustainability of the Seaport.
o Continue to build the West Coast Collaborative effort.
LEGAL:
Legal department has three major areas of functions: Attorney Services, Record Management, and Workplace
Responsibility.
ATTORNEY SERVICES
Provide legal analysis, advice, expertise, opinions and similar services, including: drafting, review and
interpretation of contracts, agreements, statutes, regulations, judicial opinions and other legal materials and
documents; prosecution and defense of claims and litigation; assistance with settlements and negotiations;
representation in arbitration, mediations and other forms of dispute resolution; representation before hearings
boards and other administrative or legislative bodies.
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RECORDS MANAGEMENT
Manage and provide public record administration, including public disclosure. Provide Portwide assistance with
regard to records management issues including retention scheduling, archiving and public disclosure. Manage
Port records in accordance with State restitution requirements.
WORKPLACE RESPONSIBILITY
Provide overall leadership and coordination of the Port"s workplace ethics and compliance activities. Coordinate
policy development and implementation. Provide information, guidance, training, and ethics-related legal
analysis, advice and counsel. Receive and manage reported violations and monitor Code of Conduct
investigations and outcomes.
Key Goals:
o Attorney Services: Support the business needs of the operating divisions.
o Records Management: Provide public record administration.
o Workplace Responsibility: Support the Port"s attainment of business objectives in a manner that
is consistent with our values and the highest standards of business ethics and workplace
behavior. Prevention of, preparation for, detection of and response to violations of the Port"s
Code of Conduct and other legal or policy expectations.
RISK:
Oversee and manage the cost of risk to the Port (measured in risk costs/$1000 of revenue) while minimizing
exposure to catastrophic loss. Provide services in claims management, contractual risk analysis, risk assessment,
risk financing, insurance purchasing and emergency preparedness in 2012. Areas of focus will be self-funding
for employee benefits, enterprise risk management, risk financing, claims management, fleet management,
contractual liability management with the Central Procurement Office, special events risk management,
construction safety, and the driver safety program, including managing the drug testing requirements for
commercial driver license holders (emphasis on the new hires for the rental car facility busing operations at the
airport). Collaborate with Internal Audit to increase visibility and broaden participation with the Divisions with
respect to additional enterprise risk management evaluations for the Port.
Key Goals:
o Maintain cost effective property and liability insurance for the Port.
o Work on special projects in which there is a risk trade off with the project benefits and to
provide insight and analysis.
o Manage ongoing claims in accordance with the Port"s Resolution and Policy EX-7 for claims
made against the Port (and by the Port) to include managing the total cost of claims.
o Maintain the cost of the self-insurance auto liability program at less than 75% of the cost to
commercially insure the Port"s auto liability exposure.
o Manage the Port Driver Safety Program which includes managing drivers with commercial
driver licenses including and oversight of drug testing for these drivers.
HEALTH & SAFETY:
Provide health and safety and Workers Comp services and expertise to enable customers to achieve the Port's
zero-based health and safety goals (zero accidents, injuries, lost workdays, Workers Comp claims and regulatory
citations and fines), and the substantial morale, productivity and financial benefits that accrue from achieving
those goals. Promote employee health improvement through wellness program offerings.
Key Goals:
o Collaborate on safe work practices and promote a healthy work force.
o Continue emphasis on health and safety improvement through our safety evaluation process.
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o Create conditions that foster health behaviors through a spirit and wellness incentive program
and collaborate with human resources on policies and integrated benefit planning to address
escalating health care costs.
o Provide system oversight to the Port"s new learning management system.
o Ensure compliance to all WAC requirements related to the Port"s self-insured workers comp and
safety program.
PUBLIC AFFAIRS:
Public Affairs includes a number of key functions/programs: community outreach, government relations,
media relations, corporate communications, and international tourism.
INTERNATIONAL TOURISM
Develop and implement growth strategies and plans in current and emerging markets to increase the
economic impact of tourism and related activities.
Promote international tourism to Seattle, the region and state from markets in China, the United
Kingdom, France and Japan in partnership with the Seattle Convention & Visitors Bureau. Partner with
statewide hospitality industry to develop long-term international tourism promotional funding and
leverage cruise program for industry access to this potential market.
MEDIA RELATIONS
Produce proactive, thoughtful communication pieces that demonstrate the port"s leadership in areas such
as trade, environmental initiatives, and business competitiveness.
Develop media strategies and relationships throughout all areas of contemporary media, produce press
releases and statements, media plans and arranges interviews, opinion editorials, etc. with the ultimate
goal of achieving understanding and support for the Port, its operations and policy positions.
Enhance public understanding through a variety of targeted media outlets (including social media) about
the port"s mission as a job-generator and environmental leader in the three operating divisions.
Highlights the port"s role as a leader in social responsibility by informing reporters and media outlets
(through one-on-one interviews, press releases, opinion editorials, press tours) about programs that
promote economic opportunities for all citizens of King County.
Develops, manages and executes media plans for crisis communications for all operating divisions.
Develops and maintains strong working relationships with reporters, editors, special publication/blog
writers both proactively and reactively (as appropriate), working to ensure accuracy in stories about the
port.
On-call 24/7 to respond to media inquiries for breaking news.
COMMUNITY ENGAGEMENT
Manage the port"s reputation and "license to operate" through proactive and strategic relationship
building with the Port"s "fence line" communities.
Work collaboratively with Port businesses (airport, seaport, real estate) to develop and execute
community engagement and communications strategies.
Proactively identify opportunities for Commissioners and senior port staff to interact (through speeches,
attending meetings, participating in discussions, etc.) with key community stakeholders and fence line
neighbors.
Develop and maintain productive working relationships with key stakeholder groups, and business and
industry leaders.
Build understanding of the Port"s goals, business strategies and overall importance to the regional
economy through strategic outreach, collateral materials, website information, tours/ information
sessions for international visitors, students, visiting dignitaries, key business partners, customers, and
elected officials and policy staff.
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GOVERNMENT RELATIONS
Advance the port"s interests in dealings with local, state and federal governments.
Provide strategic advice to senior executives and Commission on federal, state and local government
issues
Assist and support operating departments with projects, plans and permits for critical port projects
Assist in development of written materials, speeches and other presentations to government panels.
Support efforts to obtain regional, state and federal funding assistance for port projects
REGIONAL TRANSPORTATION
Works to help Port businesses achieve their business goals and results by serving as "a catalyst for
transportation solutions."
Provides project planning, management and funding, transportation policy advocacy, and synthesis of a
focused, Port-wide transportation strategy.
Key Goals:
INTERNATIONAL TOURISM
o Provide leadership to the newly formed WTA (Washington Tourism Alliance) in the development of
an industry funded statewide organization to represent Washington State for tourism development.
o Conduct a statewide symposium on international tourism in order to engage to stakeholders in
programs for European and Asian markets.
o Increase activity in all of the key partnership markets (China, Japan, France, United Kingdom and
Germany) with media and tour operator projects, and assess new markets.
o Increase tour product by 10% average in all markets.
BUSINESS AND CORPORATE COMMUNICATION
o Maintain the port"s brand through management of publications, visual design and voice, integration
across departments and throughout all media
o Integrate consistent messaging through print, website, advertising and promotional products
o Enhance public understanding and engagement with the port through websites, electronic messaging,
and products that support outreach and organizational transparency
COMMUNITY ENGAGEMENT
o Enhance program attendance by attracting new attendees and reaching new audiences.
o Effectively support Commission on speaking engagements, community interactions through use of
new tools and procedures.
o Support Aviation Division events such as opening of Rental Car Facility using cross-functional team
approach.
REGIONAL TRANSPORTATION
o Business goals drive transportation access and freight mobility improvements to accommodate trade,
trade and tourism.
o Other drivers are derived from the CEO"s goals for the Alaskan Way Viaduct and Eastside Rail
Corridor.
CENTURY AGENDA
o Century Agenda Roundtables will complete in 2011, and 2012 public review and dialogue will
strengthen 25 year plan.
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HUMAN RESOURCES AND DEVELOPMENT:
Human Resources and Development (HRD) engages and equips employees to achieve exceptional results. The
department partners with others to sustain the Port of Seattle as a vital, high performing organization. Key
responsibilities include:
Legal compliance (including but not limited to Equal Employment Opportunity, immigration,
Consolidated Omnibus Budget Reconciliation Act (COBRA), Fair Labor Standards Act (FLSA),
Family Medical Leave Act (FMLA), Americans with Disabilities Act (ADA) and Washington State
disability law, Health Insurance Portability and Accountability Act (HIPAA), Affirmative Action,
national health care reform, employment/hiring processes).
Employee relations, including investigation and resolution of employee complaints.
Coordination with Workplace Responsibility Office on communication, intake and follow-up
regarding employee issues, and continuing education.
Employment services including strategic recruitment advice and management of selection and hiring
processes.
Coaching and consulting for managers and non-managers on a wide range of human resource issues
including staffing, performance management, career development, legal compliance, Performance
Review, Evaluation, and Planning (PREP) protocols, pay and best practices, etc.
HRD Policy Review.
Diversity strategic planning.
Organizational development services to wide range of Port clients (analysis, planning, facilitation,
assistance with reorganization, process redesign, measurement, job design, etc.).
Learning and Leadership oversight for Port; design, implementation of specific classes and programs
related to employee and leader development.
HCM systems administration and maintenance of accurate employee records within the system
Employee communication regarding a wide range of human resource issues including policy,
programs, total rewards, class offerings, etc.
Strategic planning and on-going administration of Port-sponsored total rewards plans and programs.
Data gathering, analysis and costing to support collective bargaining processes.
Key Goals:
o Communicate a total rewards philosophy to Port employees and review communication materials for
potential employees to ensure they reflect the total rewards philosophy.
o Continue building the Port"s commitment to employee development with the aim of increasing
management skills (and thereby reducing time-consuming employee complaints and conflicts) as
well as providing opportunities for employees to increase their capacity to contribute to the
organization.
o Continue to refine recruitment, hiring, and "on-boarding" strategies so that the Port attracts and
retains a diverse, talented, and committed work force. Connect existing efforts such as the Veterans
Fellowship Program and the intern program to longer-term recruitment efforts. Ensure VFP and
intern strategies align with Port objectives, goals, and mission. Provide targeted recruitment and
outreach. Develop and implement training for hiring managers on hiring processes and interview
techniques.
o Provide strategic recruiting assistance and HR Business Planning to the Rental Car and Bus
Maintenance Facilities. Successfully recruit and on-board over 75 positions necessary to the
opening and ongoing success of the Rental Car Facility.
o Use internal organization development staff to assure that Port-wide efforts such as Continuous
Process Improvement (Lean) (process/quality improvement) are implemented in a manner that can
be replicated (or adjusted as necessary) across the organization.
o Use outcomes of Learning Assessment to create a 3 5 year development strategy for the Port.
o Roll out the HRD department"s Mission, Vision, and Strategies and implement processed for
periodically reviewing the strategies to ensure they are aligned with the department"s Mission and
Vision as well as Port goals and objectives.
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o Research alternatives to market pricing job evaluation tools. Other tools may lead to more
streamlined processes.
o Create a current Diversity & Development Strategic Plan.
LABOR RELATIONS:
The Labor Relations department goal is to foster open communication which explores shared interests and values
of, and enhances the cooperation and trust between, the Port, its represented employees and organized labor.
Labor Relations promotes a High Performance Organization among represented employees through continuous
education, employee development and employee recognition programs. Additionally, Labor Relations negotiates
and administers all the Collective Bargaining Agreements for the represented employees.
Key Goals:
o Foster open communication which explores shared interests and values, and enhances the
cooperation and trust between the Port, its represented employees, and organized labor.
o Invite and internally communicating the views of organized labor concerning Port capital
improvements, real estate use, real estate development projects, service changes, and economic
development projects, so as to identify areas for mutual gain.
o Promote a High Performance Organization among represented employees through continuous
education, employee development and employee recognition programs.
o Negotiate and administer contracts, which foster these relationships, maintain the Port as an
economically sustainable agency, maintain internal equity of wages and benefits and establish
the Port as an employer of choice.
o Utilize, where appropriate to the nature and scope of the project, Project Labor Agreements in
Port construction programs in order to provide labor harmony, promote best labor practices,
provide apprenticeship opportunities and provide opportunities to small contractors.
o Encourage and assist Port management to identify areas for mutual gain between the Port and
organized labor when engaged in business planning.
o Research, evaluate and, where appropriate, implement best practices in the field of labor
relations.
INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT):
Provide reliable, high-quality, cost-effective enterprise-wide infrastructure, hardware, applications, and
technology services to support the Divisions and the Port"s strategies. Support information systems for operating
divisions and work closely with them to maximize the use of ICT resources. Extend core applications and
enhance port-wide business processes as approved by the ICT Governance Board. Support, maintain, and work
to consolidate over 180 existing applications for the Port. Provide Port-wide information security and privacy
strategy. Provide policies and procedures to ensure appropriate information confidentiality, integrity, and
availability. Provide enhanced service to support an increasingly mobile workforce. Reduce operating costs by
consolidating data storage and systems where feasible. Provide technology consulting to all divisions as they
consider future technology alternatives and investments.
Key Goals:
ICT"s key responsibilities and services focus on effectively administering and managing the Port"s
enterprise Information Technology systems, services, and resources in the most cost effective manner.
Key strategies include:
o Security management: ensure that Port technology assets are well protected and that security
controls align with all legal and regulatory requirements.
o Enterprise architecture and project delivery: continue to focus on the relevance, performance,
and cost-effectiveness of the Port"s technology architecture.
o Infrastructure management and consolidation: continues to focus on infrastructure consolidation
by leveraging leading edge virtualization and storage technologies.
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o Systems integration and delivery: use a highly disciplined service-oriented architecture to
leverage existing and new enterprise assets to deliver cost effective and high quality business
solutions on time.
o Service management: continues to provide enhanced service to support an increasingly mobile
workforce, including expanded wireless capabilities.
o Financial management: continue to maintain an intense focus on financial management.
o Governance: continue to provide policy, direction, and decision-making on all technology
investments.
FINANCE AND BUDGET:
The overall goal of the Finance & Budget department is to continuously improve the institution"s management of
its assets, resources, budget, and processes.
BUDGET
Manage the Corporate budgeting process and coordinate the port-wide budget preparation and approval process.
Provide training to the Port staff on the budget system and PeopleSoft Financials Management Information
System (MIS). Provide on-going support to corporate departments and the divisions in both the budgeting and
financial performance reporting processes. Prepare and publish the budget document; file statutory budget with
King County. Monitor the operating budget and prepare monthly and quarterly reports to the Port Commission
and Executive Team. Provide on-going operating budget analysis for financial planning and decision makings.
FINANCE & TREASURY
Provide on-going debt management and regulatory compliance. Develop financial tools and policies as needed.
Evaluate opportunities to refund bonds or otherwise reduce borrowing costs. Evaluate need for bond funding of
new capital costs. Execute transactions as appropriate. Manage investment portfolio, cash flow and banking
relationships. Provide capital budget, tax levy and plan of finance information for the budget process and for
long-term funding analysis.
Key Goals:
o Manage cash and investment.
o Manage existing debt.
o Manage new debt issuance.
o Manage relationships with the finance community.
o Provide financial management tools and policies.
o Provide capital budgeting and financial planning.
o Manage the operating budget, capital budget, draft plan of finance, and statutory budget
processes effectively.
o Provide useful, timely, and accurate financial reports and information to the Executive Team and
Commissioners.
o Continue to guide managers and staff and help them fully understand that budget is an important
management tool for business planning, resources allocation, accountabilities, performance, and
control.
ACCOUNTING AND FINANCIAL REPORTING:
The Accounting & Financial Reporting (AFR) department"s key responsibilities are to administer the Port"s
broad accounting and financial reporting and related business processes, and to provide PeopleSoft Financials
& HCM/Payroll systems Port-wide functional administration.
The department"s operations provide the following Port-wide core services: Port accounting policies and
procedures development/enforcement, annual Port financial statements preparation/issuance, industry
prescribed accounting & financial reporting standards compliance assurance, accounts payable disbursements,
payroll administration, billing and lease management, accounts receivable, credit and collection enforcement,
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general ledger administration, capital project costing, cash and debt accounting, fixed assets accounting,
grants billing and reporting, corporate credit card and procurement card administration, employee expense
reimbursements, corporate tax administration, external audits facilitation, and recurring fiscal management
reporting.
Key Goals:
o Provide quality and responsive accounting and financial reporting services that meet
evolving Port-wide and divisional business needs.
o Implement business process improvements to increase productivity and operational/systems
efficiencies.
o Leverage use of technology to allow Port operations to conduct accounting and fiscal
management efficiently and in a decentralized environment.
o Improve use of the PeopleSoft Financials and HCM Payroll Administration systems and the
value they bring to the organization.
o Deliver timely and meaningful financial information that facilitates sound decisions by Port
leadership and management.
o Provide essential user knowledge on key accounting processes and systems, and
compliance with related legal and industry prescribed standards.
o Ensure timely policies and protocols that facilitate proper stewardship over public funds
and assets.
o Ensure compliance with evolving and complex accounting and financial reporting
standards.
o Open opportunities, broadly, for AFR team members to initiate and lead key focuses that
result in value-added changes to the way services are provided and business is conducted.
INTERNAL AUDIT:
Provide adequate and sufficient risk-based audit coverage across the Port. Provide the Commission and
Management with reasonable assurance that Port operations are conducted in an effective manner as intended.
Provide functional expertise to management and evaluate the effectiveness of established controls. Test the
design and effectiveness of established management controls that mitigate financial, operational, and compliance
risks throughout the Port. Conduct internal audits to determine whether Port operations or management has
complied with applicable laws and regulations. Conduct third-party arrangements to ensure Port funds/and or
public funds are used and accounted for properly. Conduct lease and concession audits to establish revenue
completeness and compliance with applicable terms and conditions.
Key Goals:
o Provide quality, value-added audit services to the Port.
o Provide competent audit staff that is knowledgeable in auditing, accounting, and performance
audits.
o Train Internal Audit staff and maintain the required continuing professional education (CPE).
o Leverage on technology in order to increase efficiency and effectiveness in our audit process.
o Increase risk awareness and control mitigation throughout the Port.
o Promote accountability and compliance with laws and regulations.
o Provide training and guidance on internal controls, best practices, and risk mitigation.
o Promote and provide guidance on Control Risk Self-Assessment, including importance of
enterprise risk management (ERM).
o Promote and audit for efficiency, effectiveness, and economy.
o Effectively communicate audit results to Audit Committee, to CEO, to Port management, and to
the public.
o Monitor and report all Port losses to the State Auditor"s Office (SAO) in compliance with state
regulations.
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OFFICE OF SOCIAL RESPONSIBILITY:
OSR"s key responsibilities and services can be categorized into five functions:
PROGRAMS
Include Small Contracting Suppliers (SCS) Program, National Urban Fellows, Clean Trucks Program, Veterans
Fellowship and other veteran-related initiatives, Community Giving Campaign, Pre-Apprenticeship and
workforce development initiatives. In addition we support the apprenticeship programs currently managed by
Labor Relations.
OUTREACH
Act as the key "point of contact" in the community regarding concerns and general issues with small businesses,
extensive participation in community based events, conferences, speaking engagements resource fairs, "meet and
greets" events, Annual Regional Contracting Forum and provide training to small businesses on "How to do
business with Port".
CUSTOMER SERVICE
Provide direct support to Port departments relating to assistance with small business roster, information and
advocacy, troubleshooting, and in-house technical expertise.
PROCUREMENT
Set small business goals and requirements on all applicable Port procurements and construction contracts.
Provide training to Port staff and small businesses and information to community stakeholders as needed.
TRAINING
Provide individual and group training to Port staff on the requirements of the new Small Contracting Suppliers
Program.
Key Goals:
o Continue to develop new format of small business utilization reports in coordination with ICT.
o Set small business goal for individual projects and track compliance accordingly.
o Develop and implement key policies related to the small business or "SCS" program.
o Oversee the workforce development and SeaTac airport employment services contract.
o Provide outreach, education and resource referrals to independent drayage truck drivers
impacted by the Clean Trucks standards adopted by the Port Commission.
o Liaison for National Urban Fellows Program.
o Support HRD"s Veterans Fellowship Program and other veteran related programs, such as Hire
America"s Heroes, where the OSR manager serves on the Board of Directors.
o Manage the Ship to Shelter Program with Public Affairs. Program remains on hold until logistic
concerns by US Customs are addressed.
o Manage the Port pre-apprenticeship and external community workforce development activities.
Support the apprenticeship programs currently managed by Labor Relations.
POLICE:
Maintain individual and organizational commitment to the Port of Seattle mission and values as well as the
International Association of Chiefs of Police, Cannons of Police Ethics.
Maintain a high performance workplace by providing primary law enforcement and public safety related
services to those who use and/or work at Port of Seattle owned and operated properties.
Enhance public understanding; implement responsive partnerships with internal and external customers.
Share Departmental resources with other ports, police, and public safety agencies to reduce the impact of
cross-jurisdictional crime to promote efficiencies and increase effectiveness.
Provide, manage, and organize the requisite resources to support the Port of Seattle Police Department
operational objectives to remain in the forefront of transportation security.
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Evaluate both Department and individual contributions as measured by our strategic plan to ensure
competency in performance, supervision, and management.
Key Goals:
o Improve the law enforcement services we provided to our various Port customers and
stakeholders.
o Achieve and maintain state and national accreditation through CALEA.
o Support the collective professional development of the Police Department.
o Improve employee job satisfaction, effectiveness, and resource utilization.
o Enhance the department"s ability to respond to acts of extraordinary violence, disasters, and
unusual occurrences.
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KEY PERFORMANCE INDICATORS/MEASURES
2010 2011 2012
Department Key Performance Indicators/Measures Actual Estimates Estimates
AFR GFOA Financial Reporting Excellence Certification yes yes yes goal
AFR Clean independent CPA audits involving AFR yes yes goal yes goal
AFR Timely process disbursement payment requests 4 days 4 days 4 days
AFR Keep receivables collections aging 90% within 30 days yes yes goal yes goal
F&B GFOA Distinguished Budget Presentation Award yes yes yes goal
F&B Investment Portfolio Yield 2.17% 1.86% 1.00%
F&B MIS and Clarity Training 143 users 90 users 90 users
HR&D Time to Hire (days) 31.25 25.00 24.25
HR&D PREPs 60+ days past due (average) 145.75 127.30 123.48
HR&D Turnover Rate (%) 3.45% 3.40% 3.45%
H&S Occupational Injury Rate 5.24 5.3 5.25
H&S Lost Work Day Case Rate 2.40 1.90 1.85
H&S Total Lost Work Days 778 550 500
H&S Required Safety Training 96% 97% 96%
ICT Percent of Commission authorized projects on budget 95% 100% 100%
ICT Percent of Commission authorized projects on schedule N/A 40% 50%
ICT Average time to close a Service Request N/A 11 days 10 days
Internal Audit Percent of annual work plan completed each year 82% 95% 95%
Amount of money suggested/ recovered as a result of lease
Internal Audit and concession audits 196K/31K 106K/105K 100K
Internal Audit Complete one central accounting systems audit every year yes yes yes goal
Internal Audit Percentage of time spent auditing vs administrative N/A 75% 75%
Labor Relations Contract Administration 40 76 114
Labor Relations Contract Negotiations 3 8 12
Assure that Port records are being maintained and managed in
accordance with State law (Other Contracted Services-Iron 20,000 boxes 20,176 boxes 20,176 boxes
Legal Mountain) in archives in archives in archives
Legal Respond to Public Disclosure Requests 281 188 YTD 250
Legal Requests for Workplace Responsibility Information/Guidance 107 150 200
Legal Report of Potential Workplace Violations 66 95 125
Police Customer Service Survey N/A 89% N/A
Police State-Mandated Training N/A 96% N/A
Police National Accreditation Standards completed 56% 100% N/A
Public Affairs Increase tourism offering across all markets N/A Up 27.43% Up by 10%
9,797,236 6,211,998 6,522,598
Public Affairs Increase traffic to the Port"s website page views page views Up by 5%
Communicate messages/strategies to general public and
Public Affairs specific target groups by increasing attendance at Port events. N/A N/A Up by 10%
Risk Mgmt Driver Program Incident Count 117 100 110
Risk Mgmt Driver Program Liaiblity Costs $ 13,300 $ 25,000 $ 50,000
Risk Mgmt Total Cost of Risk Per $1000 Port Revenue $ 10.48 $ 10.74 $ 11.57
ffilename: Adminbud.doc
updated: 10/18/2011 VIII-12
Port of Seattle 2012 Preliminary Budget
D. CORPORATE BUDGET SUMMARY
The following Tables VIII-2 & VIII-3 and Figures VIII-1 & VIII-2 illustrate the administrative expense for
Corporate by department and by account:
TABLE VIII-2: ADMINISTRATIVE EXPENSE BY DEPARTMENT
($ in 000's) % Change
2010 2011 2012 2012 Bud-
BY DEPARTMENT Notes Actual Budget Budget 2011 Bud
EXPENSES BEFORE CHARGES TO CAPITAL, NON-OPS & ENV
Commission $ 831 $ 931 $ 980 5.3%
Executive 1,356 1,500 1,539 2.6%
Labor Relations 1,110 1,239 1,267 2.3%
Legal 3,562 2,975 2,964 -0.4%
Risk Services 2,618 2,789 2,959 6.1%
Health & Safety Services 1,010 1,129 1,060 -6.1%
Public Affairs 5,554 7,012 5,815 -17.1%
Accounting & Financial Reporting 5,941 6,596 6,853 3.9%
Internal Audit 990 1,215 1,496 23.2%
Finance & Budget 1,455 1,493 1,543 3.3%
Information & Communications Technology 20,577 22,408 23,146 3.3%
Human Resources & Development 4,119 5,285 5,484 3.8%
Office of Social Responsibility 1,280 1,567 1,476 -5.8%
Police 19,273 21,452 22,574 5.2%
Contingency 21 700 700 0.0%
Total Expenses Before Charges to Capital, Non-Ops & Env 1 70,306 78,292 79,855 2.0%
CHARGES TO CAPITAL, NON-OPS, & ENV REMEDIATION (2,914) (3,283) (3,320) 1.1%
OPERATING & MAINTENANCE EXPENSE
Commission 831 931 980 5.3%
Executive 1,356 1,500 1,539 2.6%
Labor Relations 675 922 961 4.3%
Legal 3,475 2,906 2,901 -0.2%
Risk Services 2,618 2,789 2,959 6.1%
Health & Safety Services 1,001 1,129 1,060 -6.1%
Public Affairs 5,553 7,012 5,815 -17.1%
Accounting & Financial Reporting 5,939 6,596 6,853 3.9%
Internal Audit 990 1,215 1,496 23.2%
Finance & Budget 1,455 1,493 1,543 3.3%
Information & Communications Technology 18,765 19,511 20,194 3.5%
Human Resources & Development 4,107 5,285 5,484 3.8%
Office of Social Responsibility 1,280 1,567 1,476 -5.8%
Industrial Development Corporation 53 - - 0.0%
Police 19,273 21,452 22,574 5.2%
Contingency 21 700 700 0.0%
Total Operating Expenses 1 $ 67,391 $ 75,008 $ 76,535 2.0%
adminbud.xls
Notes:
1) Does not include adjustment for charges into Corporate SubClasses from Divisions.
ffilename: Adminbud.doc
updated: 10/18/2011 VIII-13
Port of Seattle 2012 Preliminary Budget
FIGURE VIII-1: ADMINISTRATIVE EXPENSE BY DEPARTMENT
Contingency
0.9%
Accounting &
Risk Services Financial Reporting Commission
3.9% 9.0% 1.3%
Executive
2.0%
Finance & Budget
Public Affairs 2.0%
Police 7.6%
Health & Safety Services
29.5%
1.4%
Human Resources &
Information & Development
Legal Communications 7.2%
3.8% Technology
26.4%
Internal Audit
2.0%
Office of Social
Responsibility
1.9%
Labor Relations Total Expense: $76,535
1.3%
ffilename: Adminbud.doc
updated: 10/18/2011 VIII-14
Port of Seattle 2012 Preliminary Budget
TABLE VIII-3: REVENUES AND EXPENSES BY ACCOUNT
($ in 000's) % Change
2010 2011 2012 2012 Bud-
BY ACCOUNT Notes Actual Budget Budget 2011 Bud
Revenue
Other Revenue 609 1,025 151 -85.3%
Total Administrative Revenue 609 1,025 151 -85.3%
Expense
Salaries, Wages, Benefits & Workers Compensation 52,662 57,214 59,742 4.4%
Equipment Expense 1,618 1,181 1,219 3.2%
Utilities 8 10 11 10.0%
Supplies & Stock 575 673 648 -3.7%
Outside Services 9,995 11,292 10,930 -3.2%
Travel & Other Employee Expenses 1,985 2,402 2,593 8.0%
Promotional Expenses 309 882 268 -69.6%
Other Expenses 3,153 4,638 4,443 -4.2%
Total Operating Expenses Before Charges to Capital 70,306 78,292 79,855 2.0%0.0%
Charges to Capital Projects (2,914) (3,283) (3,320) 1.1%
Total Administrative Expense 1 $ 67,391 $ 75,008 $ 76,535 2.0%
adminbud.xls
Notes:
1) Does not include adjustment for charges into Corporate SubClasses from Divisions.
FIGURE VIII-2: ADMINISTRATIVE EXPENSE BY ACCOUNT
Promotional Expenses
0.3%
Travel & Other Employee Other Expenses
Expenses 5.6%
3.2%
Supplies & Stock
0.8%
Outside Services
Utilities 13.7%
0.0%
Salaries, Wages, Benefits &
Equipment Expense Workers Compensation
1.5% 74.8%
Total Before Charges to Capital Projects: $79.855
Charges to Capital Projects: $3,320
Total Administrative Expense $76,535
ffilename: Adminbud.doc
updated: 10/18/2011 VIII-15
Port of Seattle 2012 Preliminary Budget
E. STAFFING
The following TABLE VIII-4 depicts the proposed staffing requirements for 2012 by department for Corporate.
Corporate is budgeting 452.2 FTEs, which is 4.6 higher than the 2011 budget. Please see the notes at the bottom
of table below for further explanations.
TABLE VIII-4: CORPORATE STAFFING
STAFFING
(Full-Time Equivalent Positions) % Change
2010 2011 2011 2012 2012 Bud -
BY DEPARTMENT Notes Actual Budget Est. Act. Budget 2011 Bud
Commission 11.0 11.0 11.0 11.0 0.0%
Executive Office 5.0 5.0 5.0 5.0 0.0%
Legal Counsel 1 14.6 14.6 14.6 15.0 2.7%
Risk Services 2 5.0 5.0 5.0 6.0 20.0%
Health & Safety 8.0 8.0 8.0 8.0 0.0%
Public Affairs 3 27.8 27.8 28.5 28.5 2.5%
Accounting & Financial Reporting 4 57.4 57.2 58.2 58.2 1.7%
Finance & Budget 10.7 10.0 10.0 10.0 0.0%
Internal Audit 9.2 9.2 9.2 9.2 0.0%
Office of Social Responsibility 5.0 5.0 5.0 5.0 0.0%
Information & Communication Technology 5 121.0 121.0 121.0 121.0 0.0%
Labor Relations 9.0 9.0 9.0 9.0 0.0%
Human Resources & Development 6 33.8 34.8 35.3 35.3 1.4%
Police 7 140.0 130.0 130.0 131.0 0.8%
TOTAL CORPORATE PROFESSIONAL &
TECHNICAL SERVICES DIVISION 457.5 447.6 449.8 452.2 1.0%
FTE.XLS PATS
Notes:
1) Legal added .4 FTE to enable WR Intake & Investigation Specialist to expand position from current .6 FTE to 1.0 FTE.
2) Risk Management added a Risk Specialist 1 position.
3) Public Affairs added 0.2 FTE for Program Manager to become full time and a 0.5 FTE for an Intern.
4) AFR was authorized 2 Limited Duration positions through 12/31/2012 and eliminated one position.
5) ICT received a mid-year approval for 911 CAD System Administrator and eliminated the CTO position in 2011.
6) HR&D erroneously deleted a 0.5 Intern for 2011 budget.
7) Police added a Sergeant for the RCF and one Communications Support position.
ffilename: Adminbud.doc
updated: 10/18/2011 VIII-16
Port of Seattle 2012 Preliminary Budget
F. CAPITAL BUDGET
Corporate has a total 2012 capital budget of $12.1 million. For more detail refer to Capital Budget, See
Section X.
TABLE VIII-5 provides a summary of the Corporate 2012 capital budget.
TABLE VIII-5: CORPORATE CAPITAL BUDGET
($ in 000's) 2012 2012-2016 % of 2012 Total
Budget CIP Committed
Committed Capital Projects
Capital Development Division $398 $4,540 3.3%
Corporate General 522 2,483 4.4%
ICT Business Services 11,002 18,152 92.3%
Total Committed $11,922 $25,175 100.0%
Business Plan Prospective Projects $2,525 $38,775
Total CIP $14,447 $63,950
capsum.xls
G. CORPORATE SUMMARY
TABLE VIII -6: CORPORATE SUMMARY
($ in 000's) 2011 Growth
Actual Budget 2012 Bud-
Budget Forecast
OPERATING BUDGET Notes 2010 2012 2011 Bud
Operating Revenue $ 609 $ 1,025 $ 1,202 $ 151 -85.3%
Corporate Expense 48,118 53,556 52,526 53,961 0.8%
Law Enforcement Costs 19,273 21,452 21,443 22,574 5.2%
Total 67,391 75,008 73,969 76,535 2.0%
Income from Operations $ (66,782) $ (73,983) $ (72,767) $ (76,384) 3.2%
CAPITAL SPENDING $ 11,545 $ 11,549 $ 8,417 $ 11,524 -0.2%
TOTAL FTEs 457.5 447.6 449.8 452.2 1.0%
admhist.xls
ffilename: Adminbud.doc
updated: 10/18/2011 VIII-17
Port of Seattle 2012 Preliminary Budget
A. TAX AT A GLANCE
The maximum allowable levy for 2012 is $90.1 million.
For 2012 the levy will be $73.5 million.
The millage rate is estimated to be $0.2329.
The 2012 levy will be used for:
o General Obligation (G.O.) Bond Debt Service
o Public Asset Expense: Freight Mobility
o Seaport and Real Estate Environmental Remediation Liability
o A portion of Real Estate operating expenses
o Real Estate Capital Improvements
o Office of Port Jobs
o Additions to the Transportation Infrastructure Fund
B. TAX LEVY SOURCES
TYPES AND LIMITS OF LEVIES:
Regular Tax Levy
The County Treasurer acts as an agent to collect property taxes levied in the County for all taxing authorities.
Taxes are levied annually on January 1 on property value listed as of the prior year. Assessed values are
established by the County Assessor at 100% of fair market value. A re-evaluation of all property is required
annually.
Taxes are due in two equal installments on April 30 and October 31. Collections are distributed to the Port by
the County Treasurer.
The Port is permitted to levy up to $0.45 per $1,000 of Assessed Valuation for general Port purposes under
Washington State law in Revised Code of Washington ("RCW") Chapter 53.36. The levy may go beyond the
$0.45 limit to provide for G.O. Bond debt service. However, the rate may be reduced below the $0.45 limit for
the following reason: RCW Chapter 84.55 limits the annual growth of regular property taxes to the lesser of
1% or the inflation rate, where inflation is measured by the percentage change in the implicit price deflator for
personal consumption expenditures for the United States, after adjustments for new construction. This 1%
limit factor was instituted by Initiative 747 that Washington State voters approved in November 2001. Prior to
the passage of the Initiative, the growth limit was the lesser of 6% or the inflation rate (for levy limit
calculation see Section XII Statutory Budget).
Filename: Levy.doc
Updated: 10/18/11 IX -1
Port of Seattle 2012 Preliminary Budget
FIGURE IX-1 shows the maximum levy permitted by law versus the actual levy levied by the Port from 1991
(the last year the Port levied the maximum) to 2012. In 1989, the law was changed whereby a port could have
a levy at less than the maximum while preserving the ability to tax up to the maximum in the future if the need
was justified. This allows a port to tax at the lower level in the years when the maximum levy is not required,
but return to the maximum level in years of need. Since 1991, on a cumulative basis, the Port has levied a
total of $349 million less than it could have if it had levied the maximum allowable levy each year.
FIGURE IX-1: ACTUAL TAX LEVY VS. MAXIMUM ALLOWABLE LEVY: 1991-2012
Millions
$100
$90
Maximum
$80 Allowable Levy
$70
$60
$50 Cumulative foregone taxes
= $349 million
$40
$30
$20 Actual Tax Levy
$10
$0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
FIGURE IX-2 shows the historical millage rate from 2003 to 2012. The Port reduced the tax levy from
$75.9 million in 2009 to $73.5 million in 2010. This amount has been held flat since then.
FIGURE IX-2: TAX LEVY VS. MILLAGE RATE 2003-2012
$ Millions
$80
$75.90 $75.90 $0.70
$73.50 $73.50 $73.50
$68.81
$70
$0.60
$62.78 $62.79
$59.66
$60 $58.00
$0.50
$50
$0.40
$40
$0.26 $0.30
$0.25 $0.25
$30 $0.23 $0.23 $0.22 $0.22 $0.22 $0.23
$0.20
$0.20
$20
$0.10
$10
$0 $0.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Tax Levy (Left Scale) Millage (Right Scale)
Filename: Levy.doc
Updated: 10/18/11 IX -2
Port of Seattle 2012 Preliminary Budget
Special Tax Levies
Special levies approved by the voters are not subject to the same limitations as the regular levy.
The Port can levy property taxes for dredging, canal construction, leveling or filling upon approval of the
majority of voters within the Port District, not to exceed $0.45 per $1,000 of Assessed Value of taxable
property within the Port District.
Industrial Development District Tax Levies
The Port may also levy property taxes for Industrial Development Districts (under a comprehensive scheme of
harbor improvements), for twelve years only, not to exceed $0.45 per $1,000 of Assessed Value of taxable
property within the Port District. The Port of Seattle levied the tax for a six-year period between 1963 and
1968 for property acquisition and development of the lower Duwamish River. If the Port intends to levy this
tax for a second six years (or the seventh through twelfth year period), the Port must publish notice of intent to
impose such a levy and if signatures of at least eight percent (8%) of the voters protest the levy, a special
election must be held with majority approval required. The Industrial Development Levy could be imposed at
up to $0.45 per $1,000 in the first year and the lesser of $0.45 per $1,000 or the 1% limit factor described
above in subsequent years. The Port has not levied the seventh through twelfth year period but if the Port were
to Levy under this law, Port may levy up to an estimated $911 million over the six year period.
C. TAX LEVY USES
Each year as part of the budget process, the Commission reviews and approves the use of the tax levy. While
the levy, by statute, may be used broadly for general Port purposes, the Port has used the levy to fund capital
investments in critical Seaport/Real Estate infrastructure and other expenditures providing community benefits
such as environmental mitigation in the Seattle Harbor and the Port's regional freight mobility initiative. The
Port also uses the levy to fund a small annual contribution to PortJobs, a non-profit organization that helps
develop Port and Airport-related career opportunities. The levy has not traditionally been used to fund
improvements at Sea-Tac International Airport, which is exclusively supported by user fees; however, the
Commission approved the use of levy funds for noise mitigation projects for the Highline School District and
improvements at the Aviation High School which are not eligible for Airport funding.
For 2012, the Port plans to use the regular levy for the debt service on G.O. Bonds, Real Estate capital
improvements, FAST Corridor, Seaport and Real Estate environmental costs, Highline Schools projects and
Port JOBS. Similar to 2011, no Seaport capital projects will be funded with the levy, and on an interim basis,
a portion of Real Estate operating expenses will be levy funded. TABLE IX-1 shows how the Port plans to
spend the levy in 2012. Additional details are provided in Tables IX-2 and IX-3.
In 2010, the Port used $13 million of tax levy to fund a Transportation & Infrastructure reserve fund (TIF) to
set aside funds for certain regional transportation projects, including the Port's contribution to the SR99
tunnel. The 2012 budget anticipates, and in 2012 plans to make an additional $25 million contribution to TIF
from the tax levy fund. The Port anticipates making a $2.5 million payment from the TIF toward the South
Park Bridge project in 2012. Expenditures from the TIF are not included in Table IX-1.
Filename: Levy.doc
Updated: 10/18/11 IX -3
Port of Seattle 2012 Preliminary Budget
TABLE IX-1: SOURCES AND USES OF TAX LEVY
TABLE IX-1 shows how the Port plans to spend the levy in 2012.
Notes 2012
(in $ 000's)
SOURCES
Prior Year Levy Fund Balance 42,118
Projected Tax Levy Collection 73,500
Eastside Rail Corridor Partner Reimbursement 5,000
Total Projected Sources 120,618
USES
G.O. Bonds Debt Service - Seaport 37,224
G.O. Bonds Debt Service - Real Estate 3,129
Total Projected G.O. Debt Service 40,353
Committed Capital Expenditures - Real Estate 10,924
Expenses:
Public Expense: Seaport Freight Mobility 1 3,954
Transportation & Infrastructure Reserve Fund 25,000
Environmental Remediation Liability 2 14,889
Portion of Real Estate Operating 4,922
Port Jobs & Apprenticeship Program 290
Aviation High School & Highline & Other Schools NOISE Insulation 7,160
Total Expenses 56,215
Capital Expenditures: BP Prospective - Real Estate 3,600
Total Projected Uses 111,092
Projected Ending Balance $ 9,526
Notes:
1) Net of grant receipts.
2) Net of Seaport Environmental Operating Expense paid from Seaport Revenues.
LevySources&Uses Tables IX-1 and IX-2 and IX-3 prelim doc.xls
Filename: Levy.doc
Updated: 10/18/11 IX -4
Port of Seattle 2012 Preliminary Budget
TABLE IX-2 provides the estimated 2012 project spending that the Port expects to fund with the tax levy. In
addition, any Real Estate Business Plan Prospective projects that are advanced in 2012 may be eligible for levy
funding.
TABLE IX-2: LEVY FUNDED COMMITTED PROJECTS
TABLE IX-2 provides the committed projects that the Port expects to fund with a portion of the tax levy
proceeds.
2012
(in $ 000's)
Real Estate
Pier 69 Renewal Projects $ 4,223
Fishermen's Terminal 3,572
Technology, Small and Other Projects 1,315
Tenant Improvements 1,148
Fleet Replacement 506
Bell Harbor Lighting Control Upgrade 160
Total Real Estate Projects $ 10,924
Filename: Levy.doc
Updated: 10/18/11 IX -5
Port of Seattle 2012 Preliminary Budget
TABLE IX-3: EXISTING G.O. BOND DEBT SERVICE BY PROJECTS AND GROUP
TABLE IX-3 provides the allocation of existing G.O. bond debt service to the projects that were funded by
G.O. bonds issued in 1994, 2000, 2004, 2006 and 2011.
2012
(in $ 000's)
Containers
Stage II Dredge- Phase I $ 922
T-5 Expansion & Upgrades 21,149
T-46 Expansion Redevelopment 4,458
T-18 Expansion & Upgrade 8,359
Total Containers 34,889
Docks and Commercial Properties
T-91 Apron & Infrastructure Improvements 2,119
Pier 17 Dock Replacement 122
T-86 Terminal Upgrades 120
Total Docks and Commercial Properties 2,362
Commercial Properties
World Trade Center Garage 640
Fishing
Fishermen's Terminal Docks & Seawall Renewal 1,657
Special Item
Eastside Trail 805
Total G.O. Bond Debt Service $ 40,353
LevySources&Uses Tables IX-1 and IX-2 and IX-3 prelim doc.xls
Filename: Levy.doc
Updated: 10/18/11 IX -6
Port of Seattle 2012 Preliminary Budget
D. GENERAL OBLIGATION CAPACITY
Non-Voted and Voted General Obligation Debt Limitations
Under Washington State law the Port may incur indebtedness payable from ad valorem taxes in an amount not
exceeding one-fourth of one percent of the value of the taxable property in the District without a vote of the
people. With the assent of three-fifths of the voters voting thereon, the District may incur additional G.O.
indebtedness provided the total indebtedness of the Port at any time shall not exceed three-fourths of one
percent of the value of the taxable property in the District. For the Port, the following estimates the 2012 debt
limit:
Value of Taxable Property $ 315,588,352,233
Debt Limit, Non-Voted General Obligation Bonds (.25% of Value of Taxable Property) $ 788,970,881
Less: Outstanding Non-Voted General Obligation Bonds as of 12/31/2011 $ 336,120,000
Less: Capital leases and other general obligations as of 9/30/2011 -
Remaining Capacity of Non-Voted General Obligation Debt $ 452,850,881
Debt Limit, Total General Obligation Debt (.75% of Value of Taxable Property) $ 2,366,912,642
Less: Total Outstanding General Obligation as of 12/31/2011 $ 336,120,000
Less: Capital leases and other general obligations as of 9/30/2011 -
Remaining Capacity of Total General Obligation Debt $ 2,030,792,642
LEVY.XLS
The Port may levy property taxes sufficient for the payment of principal of and interest on voted G.O.
indebtedness. The existing limitation provides that unless a higher rate is approved by a majority of the voters
at an election, the increase in regular total property taxes payable in the following year shall not exceed the
lesser of inflation or one percent of the amount of regular property taxes lawfully levied for such district in the
highest of the three most recent years in which such taxes were levied for such district, plus an additional
dollar amount calculated by multiplying the increase in assessed value in that district resulting from new
construction and improvements to property by the regular property tax levy rate of that district for the
preceding year. With a super majority vote, the Port Commission can increase the levy by 1% if inflation is
less than 1%.
Interaction between General Purpose Levy and General Obligation Debt Capacity
Since the 101% levy limitation applies to the total levy for G.O. debt service and for general Port purposes, an
increase in the tax levy for G.O. bonds may result in a decrease in the amount which could be levied for
general Port purposes, unless a higher aggregate tax levy was approved by the voters.
Beginning with the 2001 Budget, the Port established a target to use no more than 75% of the levy for debt
service and retain at least 25% for general purposes.
Filename: Levy.doc
Updated: 10/18/11 IX -7
Port of Seattle 2012 Preliminary Budget
E. TAXPAYER EFFECT
FIGURE IX-3 shows the assessed valuation as compared to the millage rate from 2003 to 2012. The graph
shows that the assessed value has increased from $225 billion in 2003 to an estimated $315 billion in 2012,
while millage (the rate paid per $1,000 Assessed Value) has decreased from $0.2590 in 2003, to the 2012 rate
of $0.2329. Assessed value for 2012 is estimated to be $315,588,352,233.
FIGURE IX-3: KING COUNTY ASSESSED VALUATION VS. PORT MILLAGE RATE 2003-2012
$Billions Rate/$1,000
420 $1.00
400
380 $0.90
360
340 $0.80
320
300 $0.70
280
260
$0.60
240
Assessed Value 220
$0.50
200 Millage
180
$0.40
160
140
120 $0.30
100
80 $0.20
60
40 $0.10
20
0 $0.00
03 04 05 06 07 08 09 10 11 12
Assessed Value (Left Scale) Millage (Right Scale)
F. COUNTY PROPERTY TAX COMPARISON
For 2011, the Port accounted for 2.0% of the total property taxes collected by the County.
FIGURE IX-4: 2011 PERCENTAGE OF TAX LEVIES BY TAXING DISTRICT
Port
2% All Other
State Schools
14%
21%
County
12%
Local Schools
Municipal
32%
18%
Filename: Levy.doc
Updated: 10/18/11 IX -8
Port of Seattle 2012 Preliminary Budget
CAPITAL BUDGET
The following pages provide detail of the projects included in the 2012-2016 capital budget. Additional
information can be found in each of the divisions' business plans and operating budgets, as well as the Draft
Plan of Finance section of this document.
Projects in this year's plan are divided into several categories. Committed Projects are ongoing projects or
projects that are ready to move forward and for which a funding commitment will be secured. Business Plan
Prospective Projects are less certain in timing or scope, but are considered critical for achieving business plan
goals, and the business unit or division has approved them. This category includes projects that are
considered contingent obligations of the Port. Other Prospective Projects are preliminary in nature and are
not ready for full funding commitment. Prospective projects are included in the capital budget section for
informational purposes only.
TABLE X-1: CAPITAL BUDGET
($ in 000's) Est. Act. (1) Total
2011 2012 2013 2014 2015 2016 2012-2016
Committed Projects
Aviation Division
Airfield $17,635 $49,387 $65,512 $3,000 $0 $9,000 $126,899
Business Development 1,428 4,570 758 742 500 500 7,070
Landside 101,583 72,273 0 0 0 0 72,273
Air Terminal 32,070 80,694 28,585 4,770 2,740 0 116,789
Infrastructure 10,698 34,967 11,547 6,910 0 0 53,424
Stormwater $1,624 $2,752 500 385 0 0 3,637
Airfield Security 2,483 2,062 0 0 0 0 2,062
Aviation NOISE 4,584 15,155 6,317 18,966 0 0 40,438
Aviation F&B (Division-wide) 13,007 15,066 4,577 1,200 288 0 21,131
Aviation Division 185,112 276,926 117,796 35,973 3,528 9,500 443,723
Seaport Division [2]
Lease & Asset Management [3] 18,234 19,981 3,190 1,400 0 0 24,571
Cruise & Maritime Operations [4] 7,860 3,855 0 0 0 0 3,855
Environmental Services 20 470 1,090 800 2,500 2,500 7,360
General Seaport 1,939 1,400 1,200 1,333 1,025 1,000 5,958
Security [5] 0 0 0 0 0 0 0
Seaport Division 28,053 25,706 5,480 3,533 3,525 3,500 41,744
Real Estate Division
General Real Estate 5,149 6,044 3,777 1,567 1,383 1,437 14,208
Harbor Services 4,063 0 0 0 0 0
Portfolio Management 3,978 4,880 889 432 483 433 7,117
Real Estate Division 13,190 10,924 4,666 1,999 1,866 1,870 21,325
Professional & Tech. Services
Capital Development Division 523 398 1,539 1,007 970 626 4,540
Corporate General 300 522 327 566 634 434 2,483
ICT Business Services 8,117 11,002 7,150 0 0 0 18,152
P&TS 8,940 11,922 9,016 1,573 1,604 1,060 25,175
Total Committed $235,295 $325,478 $136,958 $43,078 $10,523 $15,930 $531,967
Business Plan Prospective Projects
Aviation Division $4,290 $69,908 $172,446 $137,987 $58,713 $211,721 $650,775
Seaport Division 275 4,868 43,970 56,280 72,600 76,678 254,396
Real Estate 50 3,600 7,825 10,660 3,950 6,671 32,706
Corp General (ICT Business Services) 200 2,525 3,800 10,650 10,800 11,000 38,775
Total Business Plan Prospective $4,815 $80,901 $228,041 $215,577 $146,063 $306,070 $976,652
Total Port of Seattle $240,110 $406,379 $364,999 $258,655 $156,586 $322,000 $1,508,619
capsum.xls
[1] Estimated/Actual 2011 represents six months of actual spending and six months of projected spending.
[2] Certain CIPs moved to Real Estate division in 2008.
[3] Lease & Asset Management previously named Containers & Support Properties
[4] Cruise and Maritime Operations previously named Cruise & Industrial Properties
[5] Security moved into Cruise & Maritime Operations in 2011
Filename: _10 CapSum
Updated: 10/18/2011 X - 1
Port of Seattle 2012 Preliminary Budget
AVIATION DIVISION CAPITAL IMPROVEMENT PROGRAM
General: As presented in Section IV, the Aviation division strategic goals drive the capital program. Most
spending will aim to meet capacity and customer needs, and maintain existing assets through ongoing renewal
and replacement. Completing and opening the Consolidated Rental Car Facility will be a major milestone,
scheduled for April, 2012. Another CIP driver is the Terminal Realignment. As discussed in Section IV, the
Airport is in the process of moving many of the airlines to new locations within the terminal to accommodate
merged airlines consolidating operations in one location and to allow Alaska Air Group to consolidate its
operations on Concourse C and the North Satellite.
Major Committed Capital Projects:
Consolidated Rental Car Facility: The project is nearing completion. Major work elements remaining
include the tenant space build-outs and completion of the bus maintenance building. The project will improve
roadway congestion by removing rental cars from the airport drives and it will create additional public
parking capacity in the main garage. The total budget, including land acquisition, 29 buses, and a bus
maintenance facility is $419 million. The project's opening date is April 2012.
Terminal Escalators Modernization: This project will replace 42 aging escalators and add 2 new escalators
over a seven-year period. The total budget is $55 million. The project is underway.
Noise Remedy Program: The Port's Noise Remedy Program began in 1971 and is designed to mitigate
aircraft noise in neighborhood communities. The program involved the buy-out or insulation of single-family
houses, mobile home parks, multi-family buildings, and institutional buildings. The current program involves
insulation of single-family homes and classrooms at the Highline Community College. This program also
includes future project spending for Highline School District noise mitigation. The cost for the overall noise
remedy program for 2012 2016 totals approximately $41 million; however, $35 million of that spending is
for the improvement of the Highline School District buildings and the timing of the spending is dependent
upon the passage of school levies.
Central Plant Pre-conditioned Air: This project will provide pre-conditioned air for heating and cooling of
aircraft while parked at gates. While at a gate, an aircraft's heating and air conditioning is provided by either
the aircraft's onboard auxiliary power unit (APU) or a ground based supply system. Utilization of the
aircraft's APU is expensive and it generates significant carbon dioxide and other air emissions. The total
budget for the project is $43.5 million. The project is underway.
Aircraft Remain Overnight (RON) Parking, U.S. Postal Service (USPS) Site: This project involves buying
out the lease of the USPS Airmail Center, demolition of the building, and the construction of aircraft parking
hardstands. The lease transaction is complete and the USPS has vacated the building. Demolition of the
building is scheduled for 2011 to allow hardstand aircraft parking construction to commence in 2012. The
overnight aircraft parking positions are necessary to facilitate the early morning departures of passenger
flights. The total budget is $43.9 million.
Electrical Ground Service Equipment (EGSE) Electrification: There are two elements to this project that will
greatly improve air quality. First, the Port is investing in infrastructure and charging stations ($14.4 million).
Second, the Port is acquiring the EGSE rolling stock in order to lease to the airlines (through a consortium).
The total cost of the rolling stock is budgeted at $30 million, and includes a U.S. Department of Energy grant
for $5 million. Approximately 600 vehicles may ultimately be converted from fossil fuel to electricity when
all airlines join.
Terminal Realignment: Included within this program are the following projects: Concourse D Common Use
Expansion, Passenger Loading Bridge Acquisition, Baggage System Modifications, Exterior Gate
Improvements, and Airport Signage. These projects total approximately $27 million.
Filename: _10 CapSum
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Port of Seattle 2012 Preliminary Budget
Business Plan Prospective CIP:
The Aviation Business Plan Prospective CIP is composed of project spending for Airfield, Landside,
Terminal, Infrastructure, and other Aviation needs. Seventeen projects have moved to business plan
prospective status for 2012. Prospective projects are, by definition, not yet well scoped, so there is greater
uncertainty with regards to timing and costs than with committed projects. As scoping, design and bidding
occurs, each project moves forward in steps to the Commission to request authorization. See Section IV for a
description of major existing projects and each new project.
SEAPORT DIVISION CAPITAL IMPROVEMENT PROGRAM
General: The Seaport's current five-year capital improvement program continues the Port's emphasis on
supporting investments in facilities and infrastructure for the movement of container and non-container cargo.
Committed Capital Projects:
Lease and Asset Management: Lease and Asset Management encompasses the container terminals, the
Terminal 86 grain facility and leased Seaport industrial properties. The most significant container related
project is the redevelopment of approximately 10 acres at Terminal 25 South for container yard operations.
This project is contingent on a request by a terminal operator to lease the facility under economically feasible
terms. Other container related projects include the replacement of Terminal 5 crane cable reels, replacement
of a damaged fender system at Terminal 18, and various street vacation related projects resulting from
previous terminal expansions at Terminals 5, 18 and 30. Other industrial property projects are primarily
renewal and replacement efforts. These include the replacement of a water main at Terminal 91 and a roof
replacement for a tenant occupied cold storage building on Pier 90.
Cruise and Maritime Operations: The most significant cruise related project is the upgrade of the Pier 91
fender system. Included for Security are funds for capital projects to be largely reimbursed through TSA
Seaport Security Grants Rounds 7 and 7B and a project reimbursed through the American Recovery and
Reinvestment Act.
Environmental: The Seaport Green Initiative is made up of multiple projects primarily related to storm water
improvements.
General Seaport: Additional committed projects include small projects and technology related investments.
Business Plan Prospective CIP:
The Seaport Business Plan Prospective CIP is a combination of revenue/capacity growth,
renewal/enhancement, and environmental projects. The most notable project under revenue capacity growth
are funds for the purchase of land for future expansion of offsite container support yards for handling up to
3.5M TEU's. Renewal/enhancement projects include funds to redevelop berths 6 and 8 on Pier 90 and for
future improvements at Terminal 46. Also included is a general renewal and replacement project to allow for
projects that cannot be determined with certainty as to location, timing and cost. A key environmental project
in Business Plan Prospective status is the plan to bring shore power for cruise ships to Pier 66.
Filename: _10 CapSum
Updated: 10/18/2011 X - 3
Port of Seattle 2012 Preliminary Budget
REAL ESTATE DIVISION CAPITAL IMPROVEMENT PROGRAM
General: Projects in the Real Estate Division's current five-year capital improvement program are primarily
projects associated with the renewal and replacement of infrastructure, building components and systems that
are at or beyond the end of their useful lives. Also included is a significant investment in tenant
improvements related to the releasing of space expected to become vacant as existing leases expire.
Committed Capital Projects:
Harbor Services Projects: There are no committed projects under Harbor Services.
Portfolio Management: Key projects include HVAC improvements for the Fishermen's Center Building at
Fishermen's Terminal and a lighting control upgrade at Bell Harbor International Conference Center. Other
projects are for tenant improvements and for renewal and replacement of building components and systems
that are at or beyond the end of their useful lives.
Real Estate Development and Planning: There are no committed projects under Real Estate Development and
Planning.
General Real Estate: Committed projects include fleet replacement, technology related investments, and small
projects. Another project is installation of a corrosion protection system for the existing steel pilings under
the north apron of Pier 69 and replacement of the built-up roof on the Pier 69 Port headquarters' building.
Business Plan Prospective CIP:
The Real Estate Business Plan Prospective CIP is primarily renewal and replacement projects. Renewal and
replacement projects include various projects at Fishermen's Terminal and Shilshole Bay Marina. Also
included is a general renewal and replacement project to allow for projects that cannot be determined with
certainty as to location, timing, and cost.
COPORATE CAPITAL IMPROVEMENT PROGRAM
The Corporate Division's current five-year capital improvement program is predominantly technology
improvements and upgrades. Approximately 28% of 2012 technology capital improvement projects are
refresh of critical infrastructure and network security enhancements required to maintain compliance with
established industry standards. The remaining technology capital improvement projects are mostly for system
upgrades, replacements or consolidation of existing systems that require refresh. These technology projects
are all driven by business unit demand, with system upgrades being required to maintain system operations
and ongoing vendor support. For example, the largest corporate capital improvement project is an upgrade to
the Port's financial system. This upgrade is required to maintain system support from Oracle and was
recommended in the Moss Adams audit. Police fleet replacement and a small portion for small capital is also
included in the Corporate CIP.
CAPITAL DEVELOPMENT DIVISION CAPITAL IMPROVEMENT PROGRAM
The Capital Development Division (CDD) delivers projects and provides technical and contracting services in
support of the business plans and infrastructure needs of the Port's operating divisions. CDD includes the
following departments: Aviation Project Management Group, Central Procurement Office, Engineering, Port
Construction Services, and Seaport Management Group. The Capital Development Division's current fiveyear
capital improvement program is primarily for the replacement of equipment and vehicles that are at or
beyond the end of their useful lives. For example, the largest fleet project is to replace a 1996 F-Super Duty
truck for Port Construction Services. The lesser portion of the CIP is for Engineering equipment purchases
(survey equipment, plotter, copiers, large-format printer).
Filename: _10 CapSum
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Port of Seattle 2012 Preliminary Budget
In addition to the Committed, Business Plan Prospective and Other Prospective project categories described
above, the Port may also invest in Public Expense projects. These include authorized Public Expense projects
(projects that meet the criteria of Committed or Business Plan Prospective projects but the expenditures are
expensed instead of capitalized). This can occur when projects' improvements are created on non-Port
properties; they are generally a required component of other Committed projects or they are the Port's
contribution to regional transportation needs. In addition to the Public Expense projects, the Port anticipates
expenditures for a Special Item for its contribution toward the replacement of the Alaskan Way Viaduct
(SR99) of up to $300 million.
TABLE X-2: PUBLIC EXPENSE AND SPECIAL ITEM PROJECTS
($ in 000's) 5 Year Total
Division CIP Description 2012 2013 2014 2015 2016 (2012 - 2016)
Aviation Aviation High School $ 650 $ 650 $ 1,300
Subtotal for Aviation 650 650 - - - 1,300
Seaport Fast Corridor I (1) 2,763 - - - 2,763
Fast Corridor II 991 2,116 - 1,319 4,426
North Argo Express Access 200 1,200 600 - 2,000
Puget Sound Clean Air Agency 1,050 1,250 1,250 - 3,550
Subtotal for Seaport 5,004 4,566 1,850 1,319 - 12,739
Total - Public Expense 5,654 5,216 1,850 1,319 - 14,039
Special Item SR99 Tunnel Replacement (2) - - - - 281,000 281,000
South Park Bridge 2,500 2,500 - - 5,000
Total - Special Item 2,500 2,500 - - 281,000 286,000
Grand Total - Public Expense and Special Item Projects $ 8,154 $ 7,716 $ 1,850 $ 1,319 $ 281,000 $ 300,039
_5YrCapBud&ProspectiveProj.xlsx
Notes:
(1)
Net of grant receipts.
(2)
Payment toward the Port's contribution of up to $300 million per the Memorandum of Agreement No. GCA 4444, dated 02/09/2010.
Filename: _10 CapSum
Updated: 10/18/2011 X - 5
Port of Seattle 2012 Preliminary Budget
TABLE X-3: NON-RECURRING CAPITAL BUDGET IMPACT ON THE OPERATING BUDGET
Non- Recurring Capital Projects Budget Impact On The Operating Budget
2012 Preliminary Budget
Criteria:
1. Spending is included in the Port's Committed CIP
2. Capital spending on projects that add significant new capacity
3. Facility is not yet in use
4. Does not include improvements or upgrades to existing facilities unless the project provides additional capacity
Total
Capital Budget Recurring (R) or Non-
($ in 000's) Notes Impact Recurring (NR) 2012 2013 2014 2015 2016 2012-2016
Aviation Division:
Escalators Modernization Yes NR
Capital Spending $ 17,000 $ 6,300 $ 6,606 $ - $ - $ 29,906
Change in Operating Revenues 1 - - 2,754 2,754 2,754 8,261
Change in Operating Expenses - - - - - -
Aircraft RON Parking Yes NR
Capital Spending 4,750 30,566 3,000 - - 38,316
Change in Operating Revenues 2 - - 3,949 3,949 3,949 11,848
Change in Operating Expenses - - - - - -
Total Aviation Division -
Capital Spending 21,750 36,866 9,606 - - 68,222
Change in Operating Revenues - - 6,703 6,703 6,703 20,109
Change in Operating Expenses - - - - - -
Seaport Division: No -
-
Real Estate Division: No -
-
Professional & Tech. Services: No -
Port-wide Total -
Capital Spending 21,750 36,866 9,606 - - 68,222
Change in Operating Revenues - - 6,703 6,703 6,703 20,109
Change in Operating Expenses $ $0- $ $0- $ $0- $ $0- $ $0- $ $0-
Table X-3xls
Notes:
1) The estimated debt service for this project will be incorporated into the terminal rental cost recovery formula and thus increase revenues.
2) The estimated debt service for this project will be incorporated into the landing fee cost recovery formula and thus increase revenues.
Port of Seattle Year 2012 Preliminary Budget
Filename: _10 CapSum
Updated: 10/18/2011 X - 6
Port of Seattle 2012 Budget And Business Plan
2012-2016 Draft Plan of Finance
The Draft Plan of Finance will be available in the Final Budget Document.
filename: _11 PlanFin_20111017
updated:10/18/2011 XI-1
Port of Seattle 2012 Preliminary Budget
PORT OF SEATTLE
2012 STATUTORY BUDGET
A. INTRODUCTION
The "statutory" budget as defined in RCW 53.35.010 is to portray "the estimated expenditures and the
anticipated available funds from which all expenditures are to be paid." As a cash budget, the Statutory
Budget establishes the need for the tax levy and sets upper limits on expenditures, and is not used as an
operating budget. The function of controlling and managing the operations of the Port is accomplished with
the Operating Budget, which is provided in Sections IV through VIII.
The Preliminary 2012 Statutory Budget is provided to the Port Commissioners and made available to the
general public as required by law (RCW 53.35.010 and RCW 53.35.045). Notice of the Public Hearing, with
an announcement that copies of the preliminary budget are available for distribution to any interested persons,
will be published on October 24th, 2011, and October 31st, 2011, in the DAILY JOURNAL OF COMMERCE,
as required by law (RCW 53.35.020 and RCW 53.35.045). The final statutory budget will be filed with the
King County Council on December 1st, 2011, as allowed by RCW 53.35.045. The intent for filing on this date
is primarily to enable us to obtain public input and certified assessed valuations from the King County
Assessor prior to filing the final budget.
B. STATUTORY BUDGET HIGHLIGHTS
1. Tax Levy
For 2012, the tax levy amount is assumed to be $73,500,000. The following is a comparison of the tax levy
detail between 2011 and 2012:
Budget 2011 Budget 2012
Levy Levy Levy Levy
Rate Amount Rate Amount
For General Obligation Bonds $ 0.1229 $ 40,438,435 $ 0.1279 $ 40,352,885
For General Purposes 0.1004 33,061,565 0.1050 33,147,115
Total levy $ 0.2235 $ 73,500,000 $ 0.2329 $ 73,500,000
LEVY.XLS
2. Tax Levy Rate
The tax levy rate is a product of dividing the tax levy dollars by the assessed valuation of personal and real
properties within the Port District. Therefore, if assessed valuation increases at a greater amount than the
dollars the Port would be allowed under the 101% lid law, the tax millage rate would go down even though
the Port's levy dollars may have increased. The exact levy rate is determined by the County Assessor after all
taxing agencies have requested their levy dollars, and the assessed valuation dollars are certified. The 2011
final assessed valuation is $315,588,352,233 after omitted assessments, which are not included in the Port's
levy calculation. (The 2011 assessed valuation is used for 2012 tax collection.) This is a decrease from the
2010 assessed valuation, which was $328,927,984,810 after omitted assessment - See Section IX, Tax Levy.
Filename: Stat_bud.doc XII - 1
Updated: 10/18/2011
Port of Seattle 2012 Preliminary Budget
C. RESOLUTIONS
RESOLUTION NO. 3654
A RESOLUTION of the Port Commission of the Port of Seattle adopting the final
budget of the Port of Seattle for the year 2012; making,
determining, and deciding the amount of taxes to be levied upon the
current assessment roll; providing payment of bond redemptions
and interest, cost of future capital improvements and acquisitions,
and for such general purposes allowed by law which the Port deems
necessary; and directing the King County Council as to the specific
sums to be levied on all of the assessed property of the Port of
Seattle District in the Year 2012.
WHEREAS, the Port of Seattle Commission, on the 8th day of November, 2011, prepared the
preliminary budget of the Port of Seattle for the year 2012 and provided for the publication of Notice of Final
Budget Hearing on the adoption of said budget, to be heard on the 22nd day of November, 2011, when
taxpayers might appear and present objections to said preliminary budget; and
WHEREAS, a public hearing on said preliminary budget was held in the office of the Port
Commission, pursuant to notice duly given, in the City of Seattle, County of King, State of Washington, on the
8th of November 2011, at 1 p.m. and 22nd day of November 2011, at 1:00 p.m.; and
WHEREAS, all parties present were afforded a full opportunity to present objections to the
preliminary budget, and the Port Commission being duly advised in the premises; and
WHEREAS, the King County Assessor has notified the Commissioners of the Port of Seattle that the
final assessed valuation of the property lying within the boundaries of said district for the year 2011 is
$315,588,352,233 (after omitted assessments).
NOW, THEREFORE, BE IT RESOLVED, by the Port Commission of the Port of Seattle that the
preliminary budget of the Port of Seattle for the year 2012, as presented at the aforementioned hearing, is
hereby adopted as the final budget of the Port of Seattle for the Year 2012; and
BE IT FURTHER RESOLVED, that the amount of taxes to be levied by the Port of Seattle on the
current assessment rolls to provide for payment of bond redemption and interest on the Port of Seattle General
Filename: Stat_bud.doc XII - 2
Updated: 10/18/2011
Port of Seattle 2012 Preliminary Budget
Obligation Bonds, for future expenditures for acquisitions and capital improvements and for such general
purposes allowed by law which the Port deems necessary be set and deposited is $73,500,000; and
BE IT FURTHER RESOLVED, that the King County Council, State of Washington, be notified that
the specific sum herein mentioned being a total of $73,500,000 is necessary to be raised by taxation to meet
the payment of bond redemption and interest on Port of Seattle General Obligation Bonds, of future
expenditures for acquisitions and capital improvements, and of costs for such general purposes allowed by law
which the Port deems necessary, as set forth for the period January 1, 2012 and thereafter; that said King
County Council be respectfully requested to make a levy in said amount for the aforesaid purposes; and
BE IT FURTHER RESOLVED, that the above is a true and complete listing of levies for said
District for collection in the year 2012 and they are within the maximums established by law.
ADOPTED by the Port Commission of the Port of Seattle at a regular meeting held this ____ day of
________________________, 2011, and duly authenticated in open session by the signatures of the
Commissioners voting in favor thereof and the seal of the Commission.
Port Commission
Filename: Stat_bud.doc XII - 3
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Port of Seattle 2012 Preliminary Budget
D. TAX LEVY CALCULATION SHEET
TABLE XII-1: TAX LEVY CALCULATION SHEET
TAXING DISTRICT PORT OF SEATTLE
The following calculations are offered as an aid in the determination of the dollar limitation imposed by statute on the 2012 regular property levy for the
district and are based on figures from the King County Department of Assessments as of 10/10/2011.
Actual Levy Allowable Levy
2006 Regular Levy 62,748,329 78,064,389
2007 Regular Levy 68,813,857 80,414,188
2008 Regular Levy 75,899,369 82,628,783
2009 Regular Levy 75,899,369 85,363,322
2010 Regular Levy 73,500,000 87,243,250
2011 Regular Levy 73,500,000 88,727,622
2012 Regular Levy 73,500,000 90,121,375
2012 Regular Levy Rate 0.23290 0.28557
LIMITATION CALCULATION (RCW 84.55.010):
101% 1.0276% IPD (IPD = Implicit Price Deflator)
88,727,622 88,727,622 Maximum lawful regular levy since 1986 including lid lifts
(324,029) (324,029) Less refund fund levy
88,403,593 88,403,593 Maximum Statutory 2011 Levy, basis for calculation (1)
x 1.01 1.0276 Levy Limit Factor
89,287,629 90,839,112 Levy
1,705,295,167 1,705,295,167 Local New Construction
+ 0 0 Increase in state-assessed public utility value (2)
1,705,295,167 1,705,295,167 Total New Construction
x 0.22366 0.22366 2011 Regular Levy Rate
381,398 381,398 New Construction Levy
89,287,629 90,839,112 Levy
+ 381,398 381,398 New Construction Levy
- 0 0 Omitted Assessment Levy (3)
89,669,027 91,220,510 Total RCW 84.55 Levy
452,348 452,348 Refund Fund Levy (Relevy for prior year refunds) (4)
0 0 Levy Correction: Year of Error YYYY
90,121,375 91,672,858 Maximum 2012 Levy Based on Limit plus Refund Fund (5)
315,588,352,233 315,588,352,233 Regular levy assessed value less annexations (6)
0.28557 0.29048 Levy rate based on allowable levy
STATUTORY LEVY CALCULATION (RCW 84.52.043): Limits only general purpose levy.
315,588,352,233 Regular levy assessed value (6)
x 0.450000 Maximum Statutory Rate
= 142,014,759 Maximum 2012 Levy (Excluding Omitted Assessment Levy)
+ 0 Omitted Assessment Levy (3)
= 142,014,759 Maximum 2012 General Purpose Levy Based on Statutory Levy
All years indicated above are the year the tax is payable
1. Since 1991, the Port Commission has levied less than the maximum amount allowed by law. The calculation above shows the maximum allowable 2012 levy pursuant
to RCW 84.55.092, which allows Port districts to "set the levy at the amount which would be allowed otherwise under" the chapter of State Law (RCW 84.55) which
provides taxing authority.
2. Any increase in value in state-assessed property is considered to be new construction value for purposes of calculating the respective limits. State-assessed property is
property belonging to inter-county utility and transportation companies (telephone, railroad, airline companies and the like).
3. An omitted assessment is property value that should have been included on a prior year's tax roll but will be included on the current (2012) tax roll. Omits are assessed
and taxed at the rate in effect for the year omitted (RCW 84.40.080 - 84.40.085). Omitted assessments tax is deducted from the levy maximum before calculating
the levy rate for current assessments and added back in as current year's receivable.
4. Administrative refunds under RCW 84.69.020 were removed from the levy lid by the 1981 legislative session.
5. District is entitled to the lesser of maximum levies determined by application of the limit under RCW 84.55 and the statutory rate limit. Levies may be subject to
further proration if aggregate rate limits set in Article VII of the state constitution and in RCW 84.52.043 are exceeded.
6. Assessed valuations shown are subject to change from error corrections and appeal board decisions recorded between the date of this worksheet and final levy rate
determination.
Statlevy.xls
Filename: Stat_bud.doc XII - 4
Updated: 10/18/2011
Port of Seattle 2012 Preliminary Budget
E. FORECASTED CASH FLOW SUMMARY
TABLE XII-2: FORECASTED CASH FLOW SUMMARY
Percent
($ in 000s) 2012 of Total
Beginning balance of cash & investments $ 717,812
SOURCES OF CASH
Operating Revenues 518,095 71.6%
Interest Receipts 5,748 0.8%
Proceeds from Bond Issues 0 0.0%
Grants and Capital Contributions 33,227 4.6%
Tax Levy 73,500 10.2%
Passenger Facility Charges 63,448 8.8%
Rental Car Customer Facility Charges 21,333 2.9%
Fuel Hydrant Receipts 7,839 1.1%
Other Receipts 754 0.1%
Total 723,943 100%
Anticipated available funds 1,441,756
USES OF CASH
Expenses from Operations:
Operating & Maintenance Expense 217,361 21.4%
Corporate Administrative Expense 70,953 7.0%
Law Enforcement Costs 18,314 1.8%
Environmental Expenditures 3,096 0.3%
Total Operating Expenses 309,725 30.5%
Debt Service:
Interest Payments 159,240 15.7%
Bond Redemptions 124,200 12.2%
Total Debt Service 283,440 27.9%
Other Expenses 9,619 0.9%
Public Expense 5,654 0.6%
Capital Expenditures 406,379 40.0%
Total 1,014,817 100%
Ending balance of cash & investments $ 426,938
Increase (decrease) of cash during year $ (290,873)
cashflow.xls
Note: We built-up a significant cash balance in the past few years due to economic
uncertainty, and we are planning to draw down the cash balance in 2012.
Filename: Stat_bud.doc XII - 5
Updated: 10/18/2011
Port of Seattle 2012 Preliminary Budget
FIGURE XII-1: SOURCES OF CASH
($ in 000's)
Rental Car Customer
Facility Charges
2.9% Fuel Hydrant Receipts
Passenger 1.1% Other Receipts
Facility Charges 0.8%
8.8%
Tax Levy
Grants and Capital 10.2%
Contributions
4.6%
Operating Revenues
71.6%
Interest Receipts
0.1%
Total Sources: $723,943
FIGURE XII-2: USES OF CASH
($ in 000's)
Operating &
Maintenance Expense Corporate
21.4% Administrative Expense
7.0%
Capital Expenditures
40.0%
Law Enforcement
Costs
1.8%
Interest Payments
Bond Redemptions 15.7% Environmental
12.1% Expenditures
0.3%
Public Expense
0.6%
Other Expenses Total Uses: $1,014,817
0.9%
Filename: Stat_bud.doc XII - 6
Updated: 10/18/2011
Port of Seattle 2012 Preliminary Budget
APPENDIX A: BUDGET POLICY, PROCESS AND CALENDAR
1. OPERATING BUDGET
a. Budget Policy:
The Port establishes a budget policy to provide systematic planning as part of the management performance
and control. The purpose of this policy is to allow the capability to forecast realizable financial results over
definite periods of time. This is accomplished through planning and coordination of the various complex
operations and functions of the Port, through systematic communication and the use of the Port's financial
control and management information system.
The operating performance budget is viewed as year one of the business plans and as such, it is an essential
component of the management planning and control process. It quantifies business groups and departmental
plans for future periods in strategic, operational and monetary terms. This facilitates coordination of plans
between divisions/departments and provides a basis for control once the plan is in effect.
Various inputs to the budget planning process are required for it to be meaningful, including forecast of
economic trends and business activity levels. Above all, goals, objectives, programs, action plans and
performance measures are defined and reviewed annually for consistency and support of the Port's overall
mission.
The budget plan is based on assumptions about the success of marketing efforts, demand for services, and the
cost, availability and need for people and materials. The budget process provides continual feedback which
compares not only actual performance to the plan but also the validity of the assumptions on which the plan
was based.
The Operating Performance Budget is a management tool for controlling and analyzing each area of
responsibility. Budgeting as well as the recording of actual costs is done on an Org basis (formerly cost
center). An Org is a distinct functional and physical unit. Its performance responsibility can be assigned to
one person. There are over 200 Orgs at the Port. Each Org has a budget. The person assigned to each of
these Org budget is responsible for the operating costs of that Org. Budgeting is done on a line-item basis for
Revenues and Operating & Maintenance Expenses.
Allocated and/or indirect expenses are not budgeted for by the recipient Org. These are costs that are
allocated to business groups/unit from service providers based on the Port's standard allocation formula or
using an alternative allocation methodology. Allocated costs are general support costs that cannot be directly
attributed to a business unit, but instead support the entire Port. Costs can come from within the division
(intra-division allocation) or from outside the division (inter-department allocation).
Department Directors are responsible for preparing the operating budget for their areas of responsibility,
subject to review and approval by several levels within the organization. Orgs can be combined to analyze
and report on budgets by functional or business units. Port management needs current, timely and accurate
information to make informed decisions in a timely manner. The objective of the budget process is to
provide responsibility performance, financial and statistical information, to enhance effective management.
In addition to providing the business plan for the organization, this process results in a method of comparing
actual financial results with the approved budget plan. The appropriateness of the pricing structure or the
effects of changes in costs or activity can be observed. This approach gives management the flexibility to
evaluate the performance of a particular activity. The Budget Report (compares the proposed budget to the
current year's budget and last year's actual) and the Responsibility Report (compares actual results to budget)
can advise a manager if things are not going as expected, whether strategies are being accomplished, and also
give him/her clues as to what might be wrong. The function of controlling and managing the operations of
the Port is accomplished with the Operating Performance Budget.
Filename: _13 Appendixes
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The 2012 budget process included several Commission briefings with the operating divisions and corporate
departments during the year to update the Commission on key issues facing the business groups and to solicit
input into overall strategies and objectives. The divisions updated the Commission on each business unit
with background information, discussing capital and operating plans and dialogue on major policy issues.
Divisions fine-tuned their business plans based on Commission input and put together budgets based on
revised business plans.
Key events included budget planning meetings by the Executive Management team, the issuance of the
budget guidelines/instructions and budget calendar to divisions, training of budgeteers on usage of the budget
system, actual preparation of the budget by divisions and departments, internal budget reviews, which
includes in-depth discussion of revenue and expense assumptions, new programs, initiatives, or other
proposed increases in revenue, expenses as well as operational needs, review and agreement by the
Commissioners and Executive Management, and release of the updated proposed budget to the Port
Commission and public stakeholders.
Budget staff responded to inquiries of commission and interested stakeholders during commission budget
workshops, first and second reading and adoption of the budget following public hearings.
In addition to the Operating Performance Budget as stated above, the budget staff prepares the Statutory
Budget as defined in RCW 53.35.010 to show estimated expenditures and the anticipated available funds
from which all expenditures are paid. Being a cash budget, the Statutory Budget establishes the level of the
Port's property tax levy and sets upper limits of expenditures, and is not used as an Operating Performance
Budget.
b. Budget Adoption:
The budget is provided to the Port Commission and must be made available to the general public as required
by law - RCW 53.35.010 and RCW 53.35.045. Two Public Hearings First Reading and Second Reading
and Final Passage and Adoption of Budget are held, at which time the Port Commission will make final
recommendations and adopt the budget at a regular commission meeting and duly authenticated in open
session with an announcement of the public hearings be made in the DAILY JOURNAL OF COMMERCE
newspaper and copies of the preliminary budget be made available for distribution to any interested persons
by a specified date as required by law - RCW 53.35.020 and RCW 53.35.045.
Subsequent to the public hearing and Commission adoption of a final plan, the statutory budget and
resolution is then filed with the King County Council and King County Assessor as required by law, by a
specified date as allowed by RCW 53.35.045.
c. Monitoring of Budget:
Once an annual budget is in place, the Responsibility Report (comparing actual results to budget) is
generated monthly and variances from budget are analyzed and reported on a monthly basis, and more
extensively each quarter, to determine if corrective action is needed. Divisions and departments prepare a
quarterly year-end forecast, which is incorporated into the quarterly Performance/Variance Report. The
Performance/Variance Report is a report in narrative form explaining the reason or causes of variances
between actual revenues and expenses versus budgeted amounts on a quarterly basis. A good and accurate
monthly and quarterly performance/variance report is a very important tool for management. This report
provides explanation of variances from the approved plan and presented quarterly to Executive Management
and the Commission in public meetings. This allows Executive Management and the Commission to make
timely and well-informed decisions.
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Port of Seattle 2012 Preliminary Budget
d. Amending the Operating and Capital Budgets:
The Chief Executive Officer of the Port of Seattle is authorized Within Budget Limits to transfer budgeted
amounts between departments; however, any revisions that alter the total expenses Port-wide that are not
within the Chief Executive Officer Authorized Budget Limits require authorization from the Port
Commission.
As per Resolution 3605 as amended, whereas the Port Commission has adopted policy directives delegating
administrative authority to the Chief Executive Officer for the purpose of day-to-day management and
administration of the Port and as stated in sections 20.2.1 and 20.2.2 of said resolution:
20.2.1 Within Authorized Budget Limits means with respect to capital projects, improvements or
acquisitions, the term Within Authorized Budget Limits means that the project, improvement or
acquisition:
(i) Is included in the Port's Annually Approved Capital Budget, or
(ii) Is included in the Port's Annually Reviewed Capital Improvement Plan
(iii) Will not cause the Port to exceed the total approved dollar limit of the current Annually Approved
Capital Budget.
20.2.2 Within Authorized Budget Limits means with respect to non-capital expenditures, that the
expenditure:
(i) Is included in the total approved dollar limit of the Port's current Annual Operating Budget.
(ii) Will not cause the Port to exceed the total approved dollar limit of the Port's current Annual
Operating Budget.
e. Operating Performance Budget Process:
The steps in the 2012 operating budget process are as follows:
Budget planning meetings of Executive Management to set 2012 operating targets.
Commission strategic and business planning briefing/workshop.
Training of Budgeteers from the various divisions on the use of the budget system.
Commission briefing on 2012 budget process, key assumptions & targets.
Issuance of budget guidelines/instructions and budget calendar on the Port's intranet.
For the operating divisions, targets are developed based on the divisions' business plan forecast.
For Capital Development Division and Corporate, initial targets are based on a bottom-up assessment of
needed resources to accomplish strategy/actions plans.
Several Commission briefings with the operating divisions and corporate departments are held during the
year to update the Commission on key issues facing the business groups/departments and to solicit input
into any changes in strategy.
Budget system available for input.
Actual preparation of the budget by divisions/departments.
Corporate Finance and Budget generates budget comparison report, which compares the proposed budget
to the current year's budget and last year's actual, and also produces the current year's Forecast Report.
Divisions/departments complete their detailed budgets and are reviewed internally by their senior
managers and finance and budget staff, which include in-depth discussion of revenue and expense
assumptions, new programs, initiatives, or other proposed increases in revenue, expenses as well as
operational needs.
Divisions/departments budgets are submitted to Corporate Finance and Budget and then reviewed against
targets by Executive Management.
Executive Management makes recommendations and changes, which are incorporated into
divisions/departments budgets.
Several Commission and public budget workshops are held on divisions/departments budget and
business plans.
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All budget issues are resolved and changes are entered and made into the budget system.
Corporate Finance and Budget staff generates various reports in a timely manner and ascertains that all
approved changes are incorporated into the budget and reports are accurate.
Corporate Finance and Budget prepares preliminary budget document and releases proposed budget to
the Port Commission and stakeholders on October 27, 2011.
The First Reading of the budget on November 8, 2011.
Budget Staff answer inquiries of Commission and interested stakeholders during Commission budget
public hearing.
The Second Reading, Final Passage and Adoption of the 2012 budget on November 22, 2011 at which
time the Port Commission makes final recommendations and adopts the budget.
Filing the Statutory Budget with King County Council and King County Assessor as required by law on
December 1, 2011.
Corporate Finance and Budget staff prepares and releases the final budget document to reflect
Commission recommendations.
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Port of Seattle 2012 Preliminary Budget
FIGURE A-1: OPERATING BUDGET PROCESS FLOW CHART
OPERATING BUDGET PROCESS FLOW
CHART
Strategic Planning Commission Strategic Issuance of Budget Training of Budget Staff
Meetings of Executive Planning Workshops and Guidelines/Instructions and Preparation of
Management to set Briefing on Budget and Calendar on the Budget by
Targets Process Port's Intranet Divisions/Departments
Several Commission
Divisions/Departments Divisions/Departments Budget Comparison Briefings with
Submit Budgets Internal Budget Reviews Reports are made Divisions/Departments
Available are held to update
Commission on Key
Issues
Executive Management Commission Adopts
Reviews Proposed Budget Made Commission Budget
Divisions/Departments Available for First & Reviews Budget
Budget and Makes Second Reading
Recommendations and
Changes
Budget Filed with King
County Council and
Assessor
Filename: _13 Appendixes
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Port of Seattle 2012 Preliminary Budget
f. Operating Performance Budget Planning Calendar:
Date Activity
7/08/11 Executive Management Budget Planning meeting
8/02 8/11/11 Budget User Training
8/05/11 Budget Guidelines/Instructions and calendar available on the Port's Intranet
8/05/11 Allocation templates available for review
8/08/11 Budget System Available for Input
8/08 - 10/07/11 Preparation of budget by divisions/departments
8/16/11 Commission Briefing on 2012 Budget Process, Key Assumptions & Targets
8/16/11 Seaport & Real Estate Strategy/Business Plan Commission Presentation
8/16/11 Aviation Strategy/Business Plan Commission Presentation
8/17 - 9/01/11 Budget Staff conducts Budget Workshops to assist budgeteers with budget
9/02/11 Corporate Departments and Capital Development Division final budget entry
9/08/11 Corporate Departments and Capital Development Budget Support Documentation and
Non-Operating Budgets due to Corporate Finance and Budget
9/06 -9/23/11 Aviation, Seaport and Real Estate Internal Budget Reviews
9/19/11 Executive Management review of Corporate and Capital Development Budgets (both
Operating & Capital Budgets)
9/19/11 All Corporate Budget Issues resolved
9/20/11 Executive Management review of Seaport & Real Estate Budgets (both Operating &
Capital Budgets)
9/21/11 Executive Management review of Aviation's Budget (both Operating and Capital
Budgets)
9/27/11 Commission Meeting to review Divisions and Corporate Capital Budgets
10/03-10/14/11 Capacity Funding Analysis
10/04/11 Commission Meeting to review Divisions and Corporate Operating Budgets
10/05/11 All Outstanding Budgets Issues resolved
10/07/11 All Divisions Budgets and documents due to Corporate Finance & Budget
10/1010/14/11 Corporate Finance and Budget Staff prepares 2012 preliminary budget document
10/18/11 Preliminary Budget Document available to Commission
10/25/11 Operating Budget Update and Draft Plan of Finance Commission Briefings
10/27/11 2012 Preliminary Budget & Business Plan document is released and available to
Commission and Public
11/08/11 First Reading and Public Hearing of 2012 Preliminary Budget & Business Plan
Commission Public Hearing
11/22/11 Second Reading, Final Passage and Adoption of the 2012 Budget & Business Plan
Commission Public Hearing
12/01/11 Filing of Budget with King County Council & King County Assessor as required by law
12/14/11 Final 2012 Budget and Business Plan and Draft Plan of Finance document is published
Filename: _13 Appendixes
Updated: 9/21/2010 XIII-6
Port of Seattle 2012 Preliminary Budget
2. CAPITAL BUDGET
a. Capital Budget Policy:
As part of the Strategic Budgeting process, Corporate Finance and Budget (F&B) produces the
Capital Budget and Plan of Finance. The Capital Budget consists of all divisions' capital plans or
Capital Improvement Programs (CIP). The Plan of Finance is a five year funding plan of the CIP
that the Port publishes on an annual basis.
The divisions review and revise their CIP in conjunction with the review of their existing
business plans and strategies. The CIP is comprised of at least Committed projects from the 2011
CIP, less any that have been deleted, plus any Prospective projects that meet the criteria to move
forward to Committed status. The CIP may include Business Plan Prospective projects if
coverage targets are met. Divisions are encouraged to review CIP cash flows with respect to
timing and reasonableness to ensure effective use of capital capacity.
b. Capital Budget Process:
A preliminary capacity/funding analysis will be performed once the 2nd quarter update is
completed, but no later than by the end of August.
At the end of September, divisions will submit to Corporate Finance & Budget (F&B) the
CIP based on their updated business plans and 2011 forecasted actual (which includes actual
through second quarter). The funding implications of these capital plans will be reviewed
with the divisions and business units.
Following F&B funding analysis and Executive review of preliminary plans, business units
and divisions will finalize their business plans including their CIP for 2012 -2016.
This information will then be reviewed with Executive, presented to the Commission,
included in the 2012 Budget and Business Plan document.
After the close of the 2011 fourth quarter in January 2012, the Approved 2012 Capital Budget
will be determined based on the 2011 fourth quarter CIP update. Revised spending estimates will
be used to establish the 2012 approved funding amount for each Committed Project and for
divisions as a whole. However, only the original list of Committed Projects identified in the Plan
of Finance will be included in the approved funding amount at this time. The Approved 2012
Capital Budget will become the standard for quarterly variance reporting during the year.
Note: Even though the Commission reviews the Capital Budget in November, each individual
CIP project, with total costs in excess of $300,000, is presented and approved by the Commission
in public meeting for spending authority.
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Port of Seattle 2012 Preliminary Budget
FIGURE A-2: CAPITAL BUDGET PROCESS FLOW CHART
CAPITAL BUDGET PROCESS FLOW CHART
Preliminary Divisions Submit to F&B CIP Funding Implications are Business Units and Divisions
Capacity/Funding Analysis based on updated Business Reviewed with Divisions & Finalize Business Plans
Performed Plans & 2011 Forecasted Business Units including CIP for 2012-2016
Actual
Proposed Capital Budget Commission Workshops are Information is reviewed with
Made Available All Final Documents due to Held Executive Management and
Simultaneously with the F&B Makes Recommendations
Operating Budget for 1st &
2nd Reading
Commission Commission Adopts Budget
Reviews Capital
Budget & Plan
of Finance
Filename:_13 Appendixes
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Port of Seattle 2012 Preliminary Budget
c. Capital Budget Planning Calendar:
Following is the proposed 2012 capital budget planning calendar:
Date Activity
7/29/11 CIP 2nd Quarter Update completed (including CIP Funding)
8/16/11 Commission Special Session on Business and Capital Plans
8/26/11 Preliminary Seaport and Real Estate Forecast Models due to F&B
8/29-9/2/11 Preliminary Non-Aviation capital capacity analysis by F&B
9/19-9/21/11 Executive Review of Aviation, Seaport, Real Estate, Corp, and CDD Capital Budgets
9/23/11 Preliminary Aviation Forecast Model due to F&B
9/27/11 Aviation, Seaport, Real Estate & Corp. Capital Budgets Commission Workshop
9/30/11 Aviation, Seaport and Real Estate Forecast Model due to F&B
(CIP must match PSFS)
10/3-10/7/11 Capacity/Funding Analysis (Port-wide preliminary) by F&B
10/5/11 F&B creates CAPBUD database from Projects before Q3-2011 update
(This is a target date, actual date may change)
10/7/11 All divisional budget final documents due to F&B
10/10-10/14/11 F&B Finalize Capacity/Funding Analysis
10/18/11 Preliminary Budget Document available to Commission
10/25/11 Commission Draft Plan of Finance Workshop
10/27/11 Release of 2012-2016 Capital Budget and Draft Plan of Finance as part of the
Preliminary 2012 Budget and Business Plan document
11/8/11 First Reading and public hearing of the 2012 Budget
11/22/11 Second Reading and Final Passage of the 2012 Budget
12/14/11 Release of Final Budget and Draft Plan of Finance Document
Filename: _appendix.doc
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Port of Seattle 2012 Preliminary Budget
APPENDIX B: FINANCIAL MANAGEMENT POLICIES
The primary purpose of the Port is to broaden and strengthen the economic base of the port district. The Port
uses key criteria in various combinations as it pursues its capital and operating programs and projects. Clearly,
national and international economic strengths or weaknesses have a direct bearing upon the Port's financial
viability and role as an economic engine for the region.
1. KEY FINANCIAL TOOLS
The Port uses several tools to monitor its financial performance and these are described below
a. Long-term Target: The Port's long-term targets provide high-level policy guidance. These targets
provide guidance to the business plans created by each division.
b. Business Plans: The business plans set the strategic direction and priorities for each division. The
business plans are a planning tool, which link operations, capital investments, and the interests of the
Port's customers and the community.
c. Operating Performance Budget: The Operating Budget is a one -year slice of the business plans. It is an
essential component of the Port's management planning and control process. It quantifies line of business
and departmental plans for the next year in both operational and monetary terms. Throughout the year, the
Responsibility Reports (which compare actual results to budget) are generated monthly and variances from
budget are analyzed on a monthly basis, and more extensively each quarter, to determine if corrective
action is needed. Divisions and departments prepare a quarterly forecast, which is incorporated into the
quarterly Performance Report, which provides explanation of variances from the approved plan and is
presented quarterly to Executive Management and Commission in public meetings.
d. Balanced Budget: The Port prepares an annual budget and supports, encourages and commits to a
balanced budget in which revenues exceed expenses. In so doing, the practice is to pay for all current
operating expenses with current revenues and not postpone current year operating expenses to future years
or accrue future year's revenues to the current year. The Port's policy further requires that budgeted
operating expenses do not exceed budgeted revenues, and on-going expenses do not exceed on-going
revenues.
e. Operating Forecasts: Included in the budget document are five -year forecasts or projections of the
divisions operating revenues and expenses. The first year of this forecast is the Operating Performance
Budget.
f. Capital Budget: A detailed plan of proposed outlays or capital expenditures arising from the acquisition
or improvement of the Port's fixed assets and the means of financing them through bond proceeds, grants
and operating revenues. This document serves as an operational and planning tool and it is directly tied to
the business plans. The document identifies proposed capital projects at the airport and on the waterfront
and prioritizes those projects.
g. Capital Expenditures: Expenditures that arise from the acquisition or improvement of the Port's fixed
assets. Port assets are given a useful life of more than three years when they become active. The
expenditures reflected in the capital budget cover projects anticipated to provide modernized Seaport,
Airport and Real Estate facilities for sustained growth of the Port.
h. Capital Budget Impact on the Operating Budget: Its impact on the Operat ing Budget is through
Capitalized Labor or Charges to Capital Projects, which include the salaries and benefits costs associated
with capital projects. These costs are subtracted out of the operating budget and then budgeted in the
capital budget as part of the cost of the project(s). It is also impacted in the form of increased operating,
maintenance and depreciation expenses because of the new assets. Depreciation is a non-cash item that
represents the use of long-term assets. Port assets are given a useful life of more than three years when
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Port of Seattle 2012 Preliminary Budget
they become active and each year some of that useful life is used up, worn or depreciated. The capitalized
labor or charges to capital projects is displayed in table III-3 and the depreciation is displayed in table III-
2. The capitalized labor is also displayed in similar tables in section IV thru VIII.
i. Plan of Finance: The Five -year Capital Budget is the basis of the Plan of Finance. This document
provides a funding plan of the capital program developed within the financial targets and forecasts
described within the Draft Plan of Finance section. The Draft Plan of Finance is prepared and presented to
the Port Commission concurrently with the Operating Budget. See further discussion in the Draft Plan of
Finance, section XI.
j. Capital Investment Matrix: The matrix provides an analytical framework for capital projects. The
results of the analysis provide financial and non-financial information for the Port Commission as a guide
for capital investment decisions.
k. Financial and Operating Indicators Report: The Port uses financial and operating indicators to monitor
its financial performance and budget. The reports are produced and distributed monthly to the Port
Commission and Executive Management.
l. Treasury Management: Using its internal Treasury since July 2002, the Port has experienced increased
investment earnings, faster mobilization of funds, on-line banking capabilities, reconciliation and full
control of its cash and investments.
m. General Coverage Ratios and Cash Flow Margins: As part of its financial modeling, the Port targets
that Airport cash flow equals 1.25 times all Airport related revenue debt and that Seaport cash flow equals
1.5 times all Seaport related revenue debt. In addition, the Port targets general obligation bond debt service
use no more than seventy-five percent of the annual tax levy.
n. Bond Coverage Ratios: The Port, through financial modeling, runs projections for its revenue bond debt
service coverage ratio. Although the Port has an obligation under First Lien Revenue Bond covenants to
maintain a ratio of 1.35, as a matter of practice a ratio of at least 1.8 is maintained. Debt service coverage
may fall below this target level during periods of construction borrowing prior to the time that revenue
producing assets come on-line.
o. Fund Balances: Working capital fund balances are maintained in the General Fund and the Airport
Development Fund at a targeted level of approximately nine months of operating and maintenance
expenses. The Port maintains $5 million in the Renewal and Replacement Fund as required by bond
documents.
p. Performance/Variance Report: A report in narrative form explaining the reason or causes of variances
between actual revenues and expenses versus budgeted amounts on a quarterly basis. A good and
accurate monthly and quarterly performance/variance report is a very important tool for management.
Divisions and departments prepare a quarterly year-end forecast, which is incorporated into this report and
it is presented quarterly to Executive Management and the Commission in public meetings.
q. Commitment Control: The Port has in place a commitment control ledger that monitors department
budgets which prevents departments from exceeding their total budget without approval.
2. FINANCIAL POLICIES AND DESCRIPTION OF MAJOR FUNDS
This section, pages XIII-11 through 15 presents a summary of the Port's major financial policies and
description of its major funds.
a. Organization: The Port of Seattle (the "Port") is a municipal corporation of the State of Washington,
organized on September 5, 1911, through enabling legislation by consent of the voters within the Port
district. In 1942, the local governments in King County selected the Port to operate the Seattle-Tacoma
International Airport (the "Airport"). The Port is considered a special purpose government with a
separately elected commission of five members and is legally separate and fiscally independent of other
State or local governments. The Port has no stockholders or equity holders. All revenues or other receipts
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must be disbursed in accordance with provisions of various statutes, applicable grants, and agreements
with the holders of its bonds.
b. Reporting Entity: The Port reports the following fund: the Enterprise Fund accounts for a ll activities and
operations of the Port.
The Enterprise fund is used to account for operations and activities that are financed at least in part by fees
or charges to external users for Airport Facilities, Seaport and Real Estate properties. Therefore, the Port of
Seattle summarizes all of its fund activities in the Enterprise Fund. This includes the Port's major business
activities, which are comprised of three operating divisions - Aviation, Seaport, Real Estate; a new Capital
Development division and a Corporate division. The Aviation Division ("Aviation") serves the
predominant air travel needs of a five-county area. The Airport has 19 U.S.-flag passenger air carriers
(including regional and commuter air carriers) and ten foreign-flag passenger air carriers providing daily
nonstop service from the Airport to 97 cities, including 19 foreign cities. The Seaport Division's
("Seaport") primary focus is on facilities that serve large vessels including containerized and noncontainerized
cargo ships and cruise ships. The Seaport is a landlord port with major tenants including
shipping companies, terminal operators and other maritime related businesses. The Seaport's container
business involves the leasing of property and equipment used primarily for the transfer of international
containerized cargo arriving by ship to various modes of land transportation destined for the Pacific
Northwest and for other regions of the country and the reverse transfer of domestic goods and empty
containers arriving by rail or truck to outbound ships for distribution to other countries around the world.
The Real Estate Division incorporates projects, functions and resources from the Seaport, the Airport and
the former Economic Development group. The Real Estate Division manages the Port's holdings in
commercial real estate, recreational marinas, industrial fishing terminals and developable property.
The divisions have labor workforces subject to various collective bargaining agreements. These
workforces support the operations and maintenance of the divisions.
The new Capital Development Division was established during 2008 and became fully operational during
2009. It houses existing engineering, project management and construction functions and the Port's new
Central Procurement Office, which consolidates contracting and procurement functions.
The Corporate division provides various support services to the operating divisions and its expenses are
allocated and charged to the operating divisions.
Within the Enterprise Fund, the Port segregates non-operating expenses made to public entities which are
funded by the ad valorem tax levy. This includes expenses for district schools and infrastructure
improvements to the state and region in conjunction with other agencies. These projects are controlled by
other governmental entities and are not reflected in the Port's financial statements.
c. Basis of Accounting and Budgeting: The Port does not distinguish between the Basis of Accounting and
the Basis of Budgeting since the principles set forth as the Basis of Accounting are observed in the
budgeting process. The Port is accounted for on a flow of economic resources measurement focus. The
financial statements and the budget are prepared in accordance with accounting principles generally
accepted in the United States of America as applied to governmental units using the accrual basis of
accounting under which revenue transactions are recognized when earned and expenses are recognized
when incurred regardless of the time the cash is received or disbursed. The Government Accounting
Standard Board ("GASB") is the accepted standard-setting body for establishing governmental accounting
and financial reporting principles. GASB Statement No. 20, Accounting and Financial Reporting for
Proprietary Funds and Other Governmental Entities that Use Proprietary Fund Accounting, requires that
governments' proprietary activities apply all GASB pronouncements as well as the pronouncements of the
Financial Accounting Standards Board ("FASB") and its predecessors issued on or before November 30,
1989, unless those pronouncements conflict with or contradict GASB pronouncements. As allowed by
GASB Statement No. 20, the Port has elected to implement FASB Statements and Interpretations issued
after November 30, 1989.
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d. Use of Estimates: The preparation of the Port's budget in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions in
reporting of revenues and expenses in certain instances. Thus actual amounts could differ from those
estimates.
e. Operating Revenues: Fees for services, rents and charges for the use of Port Facilities such as:
Dockage, Wharfage, Berthage and Moorage, Airport Transportation Fees, Airport Landing Fees,
Equipment, Property Rentals and other revenues generated from port's operations are reported as operating
revenue.
f. Non-Operating Revenues: Revenues that do not result from the normal operation of Port's business such
as: Ad Valorem Tax Levy, Interest Income, Non-operating Grants, Passenger Facilities Charges and
Customer Facilities Charges and other revenues generated from non-operating sources are classified as
non-operating.
g. Operating & Maintenance Expenses: Cost or charges that arise from the norm al operation of Port's
business. These are costs or services required for a department/division to function. These include Salaries
and Benefits, Equipment expense, Supplies and Stock, Travel and Other Employee expenses and all Direct
Charges, even those from Corporate and from other Divisions.
h. Non-Operating Expenses: Cost or charges that do not arise from the normal operation of the Port's
business. An example is interest expense.
i. Capital Policy: The Port's policy is to capitalize all asset additions - Tangible Assets [Property, Plant
and Equipment] and Intangible Assets, if they exceed $20,000, whether it is a single payment or an
accumulation of related costs and with an estimated useful life of more than three years. Any asset costing
less than $20,000 will be expensed. Land, facilities and equipment are stated at cost, less accumulated
depreciation. Depreciation is computed on a straight-line basis. Buildings and improvements are assigned
lives of 30 to 50 years, equipment 3 to 20 years, and furniture and fixtures 5 to 10 years.
j. Debt Policy: The Port's debt policy is designed to ensure appropriate use and management of debt
including compliance with various laws, regulations and agreements and effective management of risk.
The policy requires use of an independent financial advisor and describes the roles of Commission and
staff. The policy describes the type and structure of debt and sets forth limitations on new debt. Key
limitations include minimum debt service coverage requirements for revenue bond debt of 1.25x for the
Airport and 1.50x for the Seaport and for Real Estate and that General Obligation bond debt service cannot
exceed 75% of the annual tax levy. The policy establishes savings targets for refundings ranging from 3%
for a current refunding with a short-term maturity/call date to 9% for a LIBOR based swap refunding with
a long-term maturity/call date. The policy also provides guidelines for the sale of bonds.
k. Description of Major Funds: There are dozens of funds that are summa rized into the Enterprise Fund.
The Enterprise Fund accounts for all activities and operations of the Port. The Enterprise fund is connected
to the functional units in that it is used to account for operations and activities that are financed at least in
part by fees or charges to external users for Airport Facilities, Seaport and Real Estate properties.
Therefore, the Port of Seattle summarizes all of its fund activities in the Enterprise Fund. This includes the
Port's major business activities, which are comprised of three operating divisions - Aviation, Seaport, Real
Estate; a Capital Development division and a Corporate division. Some of the descriptions of the major
funds are:
Types of Funds Fund Name Fund # Fund Description
1. Operating General Fund 00010 The general fund is the operating and capital fund for all
Port-owned properties and businesses with the exception
of the Seattle-Tacoma International Airport (Aviation).
Transfers are made from this fund to the revenue bond
fund for debt service and reserve requirements stemming
from revenue bonds issued for non-Airport improvements.
All Port payrolls, all purchases of materials, supplies and
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Types of Funds Fund Name Fund # Fund Description
services, and all non-Airport capital acquisition
expenditures which are not otherwise funded are made
from this fund. Periodic reports are generated indicating
what general fund monies have been expended for payrolls
or accounts payable that should be reimbursed by the other
funds. These amounts will then be transferred from such
other funds to the general funds as reimbursements.
Airport 03040 This fund is used as a depository for all Airport receipts,
Development Fund and to fund operating and maintenance expenses related to
(ADF) the Airport (Aviation). Transfers are made from this fund
to reimburse the general fund for operating and
maintenance expenses. Transfers are made from this fund
to the revenue bond fund for debt service and reserve
requirements stemming from revenue bonds issued strictly
for Airport improvements. Capital acquisition expenditures
which are not otherwise funded are also made from this
fund.
Tax Levy 00020 The Tax Levy fund was established in 2002 and is used to
receive the ad valorem tax levy by the Port. (These tax
levy proceeds were previously deposited in the General
Fund). Proceeds are used for General Obligation (G.O.)
bonds debt service. Projects that meet criteria established
by the Port may use Tax Levy as a source of funding.
Signatory Lease 03042 Established in 2006, the SLOA fund is the Security Fund
and Operating as defined in the Aviation's 2006 Signatory Lease and
Agreement (SLOA) Operating Agreement, section 19.2, Security Fund. Cash
Deposit Surety is held in this fund in lieu of lease performance sureties for
Fund the Airlines.
Customer Deposits 06010 This fund has been established as a depository of lease
Fund deposits and other monies held by the Port as surety, but
belonging to Port of Seattle customers.
2. Special Passenger Facilities The funds accruing to the PFC Revenue fund are derived
Facility Charges (PFC) : from passenger facilities charges levied on embarking
Revenue 06054 passengers at Seattle-Tacoma International Airport. Funds
Capital 03060 are to be used to pay PFC debt service and for specificallydesignated
airport facility improvement projects. All
PFC's revenues are deposited to the Revenue fund
(06054). From the Revenue fund, there is a required
monthly transfer of monies to the Debt Service fund equal
to 1/6th of semi-annual debt service payment by the 25th of
each month. The remaining balance of the Revenue fund,
which includes interest earnings, is then transferred to
Capital fund (03060).
Customer Facility CFC01 Established in 2006, the CFC Fund holds revenue derived
Charge (CFC) from charges imposed upon customers of rental car
companies accessing the Airport. Funds are to be used to
pay CFC debt service, for specifically-designated Rent-A-
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Types of Funds Fund Name Fund # Fund Description
Car (RAC) facility projects and their improvements, and
specified RAC operating expenses.
Fuel Hydrant Fund Held in The funds accruing to the Fuel Hydrant Revenue Fund are
Revenue Trust derived from Pledged Lease Revenue and Other Revenue
Debt Service as defined in Resolution No. 3504, as amended. Funds are
Project to be used to pay Fuel Hydrant bonds debt service.
Reserve
All Fuel Hydrant revenues are deposited to the Revenue
account. From the Revenue account, there is a required
monthly transfer of monies to the Debt Service account
equal to 1/12th of the annual debt service payment.
Established at the time of bond issuance, the Reserve fund
is intended to be used for debt service in the event the Port
cannot repay.
3. Debt Bond Funds Various The Port of Seattle issues bonds pursuant to bond
Related resolutions to fund its Capital Improvement Program.
Proceeds from bond issues are used to fund construction,
capitalized interest and reserves, see below.
Construction Fund Various Proceeds from bond issues are used for the Port's facilities
(CF) expansions and improvements, land acquisition, and/or pay
interest during construction. Separate funds are set up for
each bond issue to allow for the tracking and reconciliation
of bond proceeds expenditures.
Reserve Fund Various Established at the time of bond issuance for the purposes
of securing the payment of principal and interest on related
outstanding bonds. Terms set forth in the bond covenants
dictate how much the Port is required to maintain in the
Reserve fund. Not all bond issues have a cash funded
Reserve fund; the Port may instead choose to maintain
qualified surety and/or a qualified letter of credit.
Debt Service Fund Various Established as per the bond resolution to facilitate fund
(DSF) flow related to debt service
4. Other Repair and 03150 Established pursuant to Master Resolution 3577, Section 4.
Operating Renewal Fund (b), the proceeds of the fund may be used by the Port to
pay extraordinary operating and maintenance expenses,
make capital replacements, additions, expansions, repairs
and renewals of the Facilities of the Port.
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3. REVENUE AND EXPENSE ASSUMPTIONS
Operating revenues are developed based on the terms of various lease agreements and on forecasted activity
levels. Operating expenses are developed based on historical experience, forecasted activity levels and
inflation.
Aeronautical revenues are based on cost recovery. Non-airline revenues at the Airport are projected to
increase by $5.9 million or 4.0% versus the 2011 budget. Seaport revenues are projected to grow by 2.1%,
excluding the Security Grant revenue, and Real Estate revenues are anticipated to increase by 6.1% over the
2011 budget. The key business activities forecast for the Airport, Seaport and Real Estate divisions are as
follows:
Enplaned passengers: 1.5% increased from 2011 budget
TEU's volume: 11% increase from 2011 budget
Cruise passengers: 11% increase from 2011 budget
Grain volume: No change from 2011 budget
Marina occupancy rate: 94% compared to 93% in 2011 budget
Commercial Properties occupancy rate: 87% compared to 90% in 2011 budget
Port wide salaries for exempt and non-exempt employees are budgeted to increase by an average of 3.0% for
2012 and benefit costs are budgeted in two parts for employees in non-union jobs:
The first part represents the costs that are not salary based. This includes medical and dental benefits,
401(a) contributions, and Flexible Spending Account fees. This amount totals $1279.2 per benefit
eligible employee per month.
The second part represents costs that are salary based. This includes FICA, PERS, life and disability
insurance as well as PTO and EI amounts. These items total 16.61% of pay.
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APPENDIX C: BUSINESS ASSESSMENT
a. Local Economy and Outlook
The U.S. economic outlook remains extremely uncertain as of October 2011. Real gross domestic product
growth is low and unemployment remains over 9%. The political dysfunction at the federal level has dashed
any hope that fiscal policy will be able to lend monetary policy a hand in stabilizing the economy. Europe is
doddering on the brink of recession and its financial markets are affected by the poor credit standing of some
of its number countries. In Asia, China and India are slowing as their governments move to cool overheating
economies.
The Washington economy is not immune to the uncertainty plaguing the global economy. According to the
Washington State Economic and Revenue Forecast Council, the state is likely to outperform the U.S. but this
will not save us from a downturn if the national economy falters. While manufacturing continues to expand
and the exports section continues to grow for the state, construction remains weak and has a disproportionately
negative impact on revenue. Single-family housing construction remains in the doldrums. Single-family
permits in the first two months of the third quarter averaged 13,300 at a seasonally adjusted annual rate
(SAAR). While this is a bit better than the second quarter of 2011, it is still lower than any other quarter since
the second quarter of 2009.
The manufacturing sector, which has been the bright spot in the employment recovery, added 4,200 jobs, of
which 3,500 were in the aerospace sector. Private service-providing industries, which account for two out of
three jobs in Washington, have been weak adding just 3,800 jobs of which 1,800 were in the software sector. It
has been more than two years since the recession ended but there are still more than 140,000 fewer jobs in the
state than there were at the start of the recession.
The state's farming and export sectors are also doing well. Washington State exports rose 31.5% in the second
quarter of 2011 compared to the second quarter of 2010. Exports of transportation equipment (mostly Boeing
planes) were up 17.8% compared to the previous year. Transportation equipment exports normally account for
about 50% of our exports. Excluding transportation equipment, exports were up 44.2% over the year.
Overall, the state's economy is likely to outperform the U.S. in the near term.
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Port of Seattle 2012 Preliminary Budget
TABLE C-1: SUMMARY FORECAST
SUMMARY FORECAST
(Annual Percent Change) 2009 2010 2011 2012 2013
Washington State Economic Forecast
Employment -4.6 -1.4 1.1 1.4 2.1
Unemployment Rate 9.3 9.6 9.3 9.2 8.6
Real Personal Income -2.9 0.8 2.5 1.9 3.1
Consumer Price Index 0.6 0.3 2.2 0.9 1.5
Housing Permits -41.2 21.6 -0.5 3.3 29.6
Total Population (in 000's) 6668.2 6733.3 6801.4 6878.0 6968.6
% Change 1.2 1.0 1.0 1.1 1.3
Age 17 and Under 1581.9 1585.2 1585.5 1595.9 1612.3
% of Total 23.7 23.5 23.3 23.2 23.1
Age 6 - 18 1152.3 1147.2 1144.1 1144.1 1154.1
% of Total 17.3 17.0 16.8 16.6 16.6
Age 18 and Over 5086.3 5151.0 5216.0 5216.0 5356.2
% of Total 76.3 76.5 76.7 76.7 76.9
Age 21 and Over 4798.5 4861.3 4928.7 4928.7 5078.1
% of Total 72.0 72.2 72.5 72.5 72.9
Age 20 - 34 1389.8 4808.1 1429.9 1429.9 1476.4
% of Total 20.8 20.9 21.0 21.0 21.2
Age 18 - 64 4288.5 4327.6 4368.7 4368.7 4425.1
% of Total 64.3 64.3 64.2 64.2 63.5
Age 65 and Over 797.7 823.4 847.3 847.3 931.1
% of Total 12.0 12.2 12.5 12.5 13.4
Source: Washington State Economic and Revenue Forecast Council, September 2011
www.erfc.wa.gov
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Port of Seattle 2012 Preliminary Budget
TABLE C-2: STATE EMPLOYMENT BY INDUSTRY
Washington State 2010 Average Employment Classified by Industry
Average Average Average
Industry Description Firms Employment Annual Wage
Agriculture, Forestry, Fishing, and Hunting 7,249 87,721 $24,027
Mining 166 2,148 $55,663
Ultilities 232 4,815 $77,591
Construction 21,674 130,719 $51,120
Manufacturing 6,895 254,831 $64,927
Wholesale Trade 12,988 118,241 $63,344
Retaill Trade 14,093 303,051 $30,026
Transportation & Warehousing 3,956 78,683 $47,731
Information 2,418 102,203 $109,766
Finance and Insurance 5,629 88,151 $70,132
Real Estate, Rental and Leasing 6,313 43,857 $38,362
Professional, Scientific, and Technical Services 18,470 157,196 $75,367
Management of Companies and Enterprises 604 31,767 $95,770
Administrative, Support, Waste Management and Remediation Services 9,441 130,261 $41,467
Educational Services 2,400 33,752 $35,162
Health Care and Social Assistance 14,242 322,265 $44,668
Arts, Entertainment, and Recreation 2,427 44,598 $25,122
Accommodation and Food Services 12,781 218,144 $17,638
Other Services (Except Public Administration) 64,938 130,597 $24,229
Government 2,092 525,473 $51,389
Total 209,003 2,808,470 $48,519
Source: Washington State Employment Security Department Labor Market and Economic
Analysis, Quarterly Census of Employment and Wages,Annual Averages 2010 QCEW Annual Data
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Port of Seattle 2012 Preliminary Budget
TABLE C-3: TOP 10 PUBLIC COMPANIES IN WASHINGTON
Washington State top 10 Companies
(ranked by 2010 total Sales)
2010 Operating
# of Income 2010 Sales
Company Industry Employees (in thousands) (in millions) Website
Costco Wholesale Retail 147,000 $2,085,000 $77,946 www.costco.com
Microsoft Computer software 89,000 $24,157,000 $62,484 www.microsoft.com
Amazon.com Retail 33,700 $1,406,000 $34,204 www.amazon.com
Starbucks Retail 137,000 $1,324,300 $10,707 www.starbucks.com
Paccar Transportation 17,700 $648,500 $10,293 www.paccar.com
Nordstrom Retail 54,000 $1,118,000 $9,700 www.nordstrom.com
Weyerhaeuser Forest products 14,250 $617,000 $6,552 www.weyerhaeuser.com
Expeditors International Transportation 12,880 $547,230 $5,968 www.expd.com
Alaska Air Group Transportation 12,039 $484,800 $3,832 www.alaskaair.com
Expedia Retail 8,900 $737,457 $3,348 www.expediainc.com
Source: Data extracted from the Seattle Times 2010 Best of the Northwest database
http://seattletimes.nwsource.com/flatpages/businesstechnology/2010nwcompaniesfinancials.html
b. North American West Coast Port s' Container Volume Comparison
TABLE C-4: NOR TH AMERICAN WEST COAST PORTS' TOTAL CONTAINER VOLUMES
COMPARISON
North American West Coast Ports' Total Container Volumes
2000- 2010
Total container volume measured in TEUs (= domestic + international full and empty TEUs)
'00 - '10
avg.
annual '10 vs. '09
PORT 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 % +/- % +/-
Long Beach 4,600,787 4,462,967 4,526,365 4,658,124 5,779,852 6,709,818 7,290,365 7,312,465 6,487,816 5,067,597 6,263,499 3.1% 23.6%
Los Angeles 4,879,429 5,183,520 6,105,863 7,178,940 7,321,440 7,484,624 8,469,853 8,355,039 7,849,985 6,748,995 7,831,902 4.8% 16.0%
Oakland 1,776,922 1,643,585 1,707,827 1,923,104 2,047,504 2,273,990 2,391,745 2,387,911 2,233,533 2,045,211 2,330,202 2.7% 13.9%
Portland 290,943 278,491 255,745 339,571 274,609 160,479 214,484 262,246 245,459 174,203 181,100 -4.6% 4.0%
Prince Rupert - - - - - - - 16,686 182,242 265,223 343,366 - 29.5%
San Francisco 50,147 34,618 23,682 20,633 32,045 - - - - - - -100.0% -
Seattle 1,488,268 1,315,109 1,438,872 1,486,382 1,775,858 2,087,929 1,987,360 1,973,504 1,704,492 1,584,596 2,139,577 3.7% 35.0%
Tacoma 1,376,377 1,320,274 1,470,834 1,738,068 1,797,560 2,066,447 2,067,186 1,924,934 1,861,352 1,545,855 1,455,467 0.6% -5.8%
Vancouver 1,167,489 1,146,577 1,465,292 1,547,371 1,664,906 1,767,379 2,207,748 2,307,291 2,492,107 2,152,462 2,514,309 8.0% 16.8%
Total: 15,630,362 15,385,141 16,994,480 18,892,193 20,693,774 22,550,666 24,628,741 24,540,076 23,056,986 19,584,141 23,059,422 4.0% 17.7%
2008 Vancouver volumes first year of VFPA
Data source: Port Authorities
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Port of Seattle 2012 Preliminary Budget
c. Economic Impact
The Port of Seattle retained Martin Associates to evaluate the economic impacts generated by the Seattle
seaport, Seattle-Tacoma International Airport and the Port's non-maritime and non-aviation tenants, based on
business activity data collected in 2007-2008. The firm has conducted similar studies at more than 250
seaports and most major airports in North America.
For the seaport, the study measures the impacts of five distinct types of waterborne activity:
Marine cargo activity
Fishing activity at marine terminals (and related services)
Waterborne passenger activity (cruise and shoreside operations)
Marina activity (recreational and transient boating)
Non-marine cargo and non-aviation Port of Seattle real estate tenants (restaurant, retail, and industry-
related services.
For the airport, the study measures the impacts of five business sectors:
Airline/airport service sector
Freight transportation sector
Passenger ground transportation sector
Contract construction/consulting services sector
Visitors' industry sector
The study includes interviews with 929 firms doing business with the Port, plus surveys with 950 aviation
passengers and 600 cruise passengers and ship crew. The analysis of real estate tenants is based on a survey of
291 tenants not included in other seaport operations.
The results provide a snapshot of the economic impact of Port of Seattle in 2007-2008, and impact models for
each business unit operated by the Port of Seattle. The study provides models to assess the economic impacts
of specific Port of Seattle capital development projects.
By air, land and sea, the Port of Seattle connects passengers and cargo to destinations around the globe. From
tourism and international trade to fishing, boating and imported products, the Port affects nearly every person
in the Northwest regiongenerating nearly 194,000 jobsand affects many others throughout the world.
Successful trade and travel generate substantialand dependablerevenue, including $17 billion in business
revenue in 2007. The Port of Seattle's airport, seaport and real estate activities contribute to the local and
regional economy on multiple levels through the reinvestment and re-spending of Port-generated revenue and
income.
Results demonstrate the Port is a strong driving force for sustainable economic vitality. When combined with
its tenants, Port of Seattle is responsible for the direct employment of 111,317 individuals, ranking among the
top job-producers in the region including Microsoft (35,510 in Seattle and Washington state), Boeing (74,517),
and the University of Washington (28,188).
Port of Seattle seaport and airport facilities, as well as non-maritime and non-aviation related Port real estate
tenants, generate the following economic impacts for the local and regional economy in 2007:
111,317 direct jobs are generated by Port-owned transportation facilities.
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Port of Seattle 2012 Preliminary Budget
As the result of local and regional purchases by those individuals, an additional 62,128 induced jobs are
supported in the region.
20,540 indirect jobs were supported by $1.4 billion of local purchases by businesses supplying services at
the Port-owned facilities.
$3.8 billion of direct wages and salaries were received by those 111,317 directly employed by the Port's
transportation infrastructure. As the result of re-spending this income, an additional $5.1 billion of income
and consumption expenditures were created in the Seattle region, primarily King County.
Businesses providing services at Port-owned marine terminals and Sea-Tac Airport, as well as real estate
tenants, received $17.6 billion of revenue, excluding the value of cargo shipped through the airport and
marine facilities, and the landed value of the seafood caught by the fleet using Fishermen's Terminal,
Terminal 91 and the Maritime Industrial Center.
$867.0 million of state and local taxes were generated by activity at the Port of Seattle marine terminals,
real estate tenants, and Sea-Tac International Airport. Of the $867.0 million of state and local taxes, the
State of Washington receives about $561.1 million, and the balance, $305.9 million, was received by local
and county governments within the State. In addition, $439.4 million of federal aviation-specific taxes
were generated by activity at Sea-Tac International Airport.
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APPENDIX D: BOND AMORTIZATION SCHEDULES
TABLE D-1: BOND AMORTIZATION SCHEDULE FOR 2011
Bond Type Original Issue Issue Outstanding 2010 Principal Payments Outstanding Interest Payments [1]
Series Amount Date Jan. 1, 2010 Due Date Amount Dec. 31, 2010 Due Date Amount
GENERAL OBLIGATION BONDS
Limited Tax G.O., Series 2000A $9,840,000 [16] 04/06/00 310,000 12/01/10 310,000 - 06/01, 12/01 15,810
Limited Tax G.O., Series 2000B $107,305,000 04/06/00 84,120,000 12/01/10 3,305,000 80,815,000 06/01, 12/01 4,913,298
Limited Tax G.O., Series 2004A $107,305,000 01/27/04 32,510,000 - 32,510,000 05/01, 11/01 1,562,400
Limited Tax G.O., Series 2004B $32,510,000 01/27/04 99,155,000 11/01/10 6,675,000 92,480,000 05/01, 11/01 4,939,225
Limited Tax G.O., Series 2004C Ref. $32,510,000 [3] 01/27/04 79,590,000 11/01/10 11,525,000 68,065,000 05/01, 11/01 4,114,388
Limited Tax G.O., Series 2006 Ref. $61,630,000 [15] 01/05/06 61,630,000 - 61,630,000 06/01, 12/01 3,065,725
TOTAL GENERAL OBLIGATION BONDS 357,315,000 21,815,000 335,500,000 18,610,845
REVENUE BONDS
First Lien Bonds
Series 1998A Refunding $73,180,000 [5,19] 05/07/98 27,350,000 08/10/10 27,350,000 - 06/01 972,720
Series 2000B $221,590,000 [20] 07/27/00 183,015,000 08/10/10 136,060,000 46,955,000 02/01, 08/01 10,620,268
Series 2000D Refunding $28,085,000 [6] 07/27/00 6,765,000 02/01/10 3,290,000 3,475,000 02/01, 08/01 298,975
Series 2001A $176,105,000 10/05/01 176,105,000 - 176,105,000 04/01, 10/01 8,805,250
Series 2001B $251,380,000 10/05/01 217,785,000 04/01/10 9,620,000 208,165,000 04/01, 10/01 11,378,055
Series 2001C Refunding $12,205,000 [7] 10/05/01 12,205,000 - 12,205,000 06/01, 12/01 681,713
Series 2001D Refunding $68,580,000 [8] 08/07/02 [8] 45,445,000 11/01/10 4,575,000 40,870,000 05/01, 11/01 2,613,088
Series 2003A $190,470,000 07/30/03 188,190,000 07/01/10 7,360,000 180,830,000 01/01, 07/01 9,661,213
Series 2003B $164,900,000 07/30/03 146,900,000 - 146,900,000 01/01, 07/01 7,563,354
Series 2004 Refunding $24,710,000 [4, 5] 06/15/04 17,500,000 06/01/10 2,330,000 15,170,000 06/01, 12/01 875,460
Series 2007A $27,880,000 03/06/07 27,880,000 - 27,880,000 04/01, 10/01 1,383,975
Series 2007B $200,115,000 03/06/07 193,115,000 10/01/10 5,345,000 187,770,000 04/01, 10/01 9,645,965
Series 2009A $20,705,000 07/16/09 20,705,000 - 20,705,000 05/01, 11/01 1,087,013
Series 2009B-1 $274,255,000 07/16/09 274,255,000 274,255,000 05/01, 11/01 18,960,907
Series 2009B-2 $22,000,326 [18] 07/16/09 $22,748,866 - 24,463,499
Total First Lien Bonds 1,559,963,866 195,930,000 1,365,748,499 84,547,954
Intermediate Lien Bonds
Series 2005A New $ $252,190,000 07/20/05 252,190,000 03/01/10 930,000 251,260,000 03/01, 09/01 12,601,325
Series 2005A - Ref. 1994A $12,030,000 [12] 07/20/05 8,310,000 03/01/10 4,045,000 4,265,000 03/01, 09/01 314,375
Series 2005A - Ref. 1996A $31,475,000 [13] 07/20/05 31,035,000 - 31,035,000 03/01, 09/01 1,551,750
Series 2005A - Ref. 1997A $108,900,000 [14] 07/20/05 99,440,000 03/01/10 5,525,000 93,915,000 03/01, 09/01 4,850,900
Series 2005C - Ref. 1996B $40,120,000 [11] 06/06/06 [11] 35,730,000 09/01/10 4,050,000 31,680,000 03/01, 09/01 1,786,500
Series 2006A - Ref. 2000A $124,625,000 [16] 06/08/06 124,625,000 - 124,625,000 02/01, 08/01 6,172,675
Series 2010A Ref. 1998A $25,200,000 [19] 07/15/10 - - 25,200,000 12/01 318,923
Series 2010B New Money $157,880,000 07/15/10 - - 157,880,000 12/01 2,530,568
Series 2010B Ref. 2000B $63,435,000 [20] 07/15/10 - - 63,435,000 12/01 1,024,258
Series 2010C Ref. 2005D $128,140,000 [21] 07/15/10 - - 128,140,000 -
Total Intermediate Lien Bonds 551,330,000 14,550,000 911,435,000 31,151,273
Subordinate Lien Bonds
Series 1997 $108,830,000 03/26/97 108,830,000 09/01/10 - [2] 108,830,000 Various [2] 3,809,050
Series 1998 Refunding $27,930,000 [4, 5] 05/07/98 14,150,000 08/01/10 1,475,000 12,675,000 02/01, 08/01 718,838
Series 1999A $127,140,000 11/14/02 121,840,000 - 121,840,000 03/01, 09/01 6,426,113
Series 1999B $116,815,000 11/14/02 66,515,000 09/01/10 8,420,000 58,095,000 03/01, 09/01 3,658,325
Series 2005D $62,925,000 [21] 08/16/05 62,925,000 08/10/10 62,925,000 - Various [2] 2,202,375
Series 2008 $200,715,000 [17] 06/11/08 200,715,000 - 200,715,000 Various [2] 7,025,025
Total Subordinate Lien Bonds 574,975,000 72,820,000 502,155,000 23,839,725
TOTAL REVENUE BONDS 2,686,268,866 283,300,000 2,779,338,499 139,538,952
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SPECIAL REVENUE BONDS
PFC Rev. Bonds Series 1998A $118,490,000 [9] 07/16/98 118,490,000 12/01/10 - 118,490,000 06/01, 12/01 6,079,600
PFC Rev. Bonds Series 1998B $144,010,000 [9] 07/16/98 81,665,000 12/01/10 10,030,000 71,635,000 06/01, 12/01 4,315,003
TOTAL SPECIAL REVENUE BONDS 200,155,000 10,030,000 190,125,000 10,394,603
SPECIAL FACILITY REVENUE BONDS
Fuel Facilities Series 2003 $121,140,000 [10] 05/01/03 107,950,000 06/01/10 2,485,000 105,465,000 06/01, 12/01 5,462,075
TOTAL SPECIAL FACILITY REVENUE BONDS 107,950,000 2,485,000 $105,465,000 5,462,075
Notes:
[1] - Interest Payments shown in this schedule are gross amounts before use of any Capitalized Interest.
[2] - Estimated annual total. Interest paid monthly or at maturity. Principal paid annual or at maturity.
[3] - Series 2004C G. O. Ref. bonds refunded a portion of the Port's 1994B Revenue bonds, and refunded a portion of the 1994 G. O. bonds.
[4] - Series 2004 refunded a portion of the Port's existing series 1992A, 1994A, 1996B and 1998 revenue bonds.
[5] - Series 1998 (First Lien & Sub-Lien) refunded a portion of the Port's 1990 and 1992 bonds.
[6] - Series 2000D refunded a portion of the Port's 1990B bonds.
[7] - Series 2001C refunded a portion of the Port's 1990B bonds.
[8] - Series 2001D refunded a portion of the Port's 1992B bonds. It had a delayed delivery date of 8/7/02.
[9] - Debt services for PFC Bonds will be paid directly out of receipts from PFCs, not out of operating cash flow.
[10]-Debt services for Fuel Facilities is paid directly from Fuel Hydrant Facility income, not out of general operating cash flow.
[11] - Series 2005C refunded a portion of the Port's 1996B bonds. It had a delayed delivery date of 6/6/2006.
[12] - Series 2005A-Ref. 1994A refunded a portion of the Port's 1994A bonds.
[13] - Series 2005A-Ref. 1996A refunded a portion of the Port's 1996A bonds.
[14] - Series 2005A-Ref. 1997A refunded a portion of the Port's 1997A bonds.
[15] - Series 2006 G. O. Ref. Bonds refunded a portion of the Port's 1999A Special Facility bonds, and refunded a portion of the 2000A G. O. bonds.
[16] - Series 2006A Intermediate Lien refunded the outstanding 2000A First Lien series bonds.
[17] - Series 2008 Subordinate Lien refunded the 2003C bonds.
[18] - Series 2009B-2 First Lien Capital Appreciation Bonds were issued at $22,000,326 par. The outstanding principle balance at 12/31/2010 includes $2,463,000.00 of accumulated accreted interest.
[19] - Series 2010A Ref. 1998A Intermediate Lien refunded the outstanding 1998A First Lien series bonds.
[20] - Series 2010B Ref. 2000B Intermediate lien refunded a portion of the Port's 2000B Bonds.
[21] - Series 2010C Ref. 2005D Intermediate Lien refunded the 2005D Subordinate Lien Series Bonds.
The Port has authority to issue up to $250 million in Commercial Paper, as of 09/30/2010 the Port had $110.455 million outstanding. bondam.xls
Filename: _appendix.doc
Updated: 10/18/2011 XIII-24
Port of Seattle 2012 Preliminary Budget
TABLE D-2: BOND AMORTIZATION SCHEDULE FOR 2012
Bond Type Original Issue Issue Outstanding 2011 Principal Payments Outstanding Interest Payments [1]
Series Amount Date Jan. 1, 2011 Due Date Amount Dec. 31, 2011 Due Date Amount
GENERAL OBLIGATION BONDS
Limited Tax G.O., Series 2000A $9,840,000 [15] 04/06/00 - - - 06/01, 12/01 -
Limited Tax G.O., Series 2000B $107,305,000 04/06/00 80,815,000 12/01/11 3,495,000 77,320,000 06/01, 12/01 4,723,260
Limited Tax G.O., Series 2004A $107,305,000 01/27/04 32,510,000 - 32,510,000 05/01, 11/01 1,562,400
Limited Tax G.O., Series 2004B $32,510,000 01/27/04 92,480,000 11/01/11 7,005,000 85,475,000 05/01, 11/01 4,605,475
Limited Tax G.O., Series 2004C Ref. $32,510,000 [3] 01/27/04 68,065,000 11/01/11 12,100,000 55,965,000 05/01, 11/01 3,538,138
Limited Tax G.O., Series 2006 Ref. $61,630,000 [15] 01/05/06 61,630,000 06/01/11 350,000 61,280,000 06/01, 12/01 3,059,163
TOTAL GENERAL OBLIGATION BONDS 335,500,000 22,950,000 312,550,000 17,488,435
REVENUE BONDS
First Lien Bonds
Series 2000B $221,590,000 [20] 07/27/00 46,955,000 02/01/11 8,300,000 38,655,000 02/01, 08/01 2,568,300
Series 2000D Refunding $28,085,000 [6] 07/27/00 3,475,000 02/01/11 3,475,000 - 02/01 104,250
Series 2001A $176,105,000 10/05/01 176,105,000 176,105,000 04/01, 10/01 8,805,250
Series 2001B $251,380,000 10/05/01 208,165,000 04/01/11 10,165,000 198,000,000 04/01, 10/01 10,833,967
Series 2001C Refunding $12,205,000 [7] 10/05/01 12,205,000 12,205,000 06/01, 12/01 681,713
Series 2001D Refunding $68,580,000 [8] 08/07/02 [8] 40,870,000 11/01/11 4,890,000 35,980,000 05/01, 11/01 2,350,025
Series 2003A $190,470,000 07/30/03 180,830,000 07/01/11 7,745,000 173,085,000 01/01, 07/01 9,274,813
Series 2003B $164,900,000 07/30/03 146,900,000 146,900,000 01/01, 07/01 7,563,354
Series 2004 Refunding $24,710,000 [4, 5] 06/15/04 15,170,000 06/01/11 2,430,000 12,740,000 06/01, 12/01 756,410
Series 2007A $27,880,000 03/20/07 27,880,000 27,880,000 04/01, 10/01 1,383,975
Series 2007B $200,115,000 03/20/07 187,770,000 10/01/11 5,610,000 182,160,000 04/01, 10/01 9,380,090
Series 2009A $20,705,000 07/16/09 20,705,000 20,705,000 05/01, 11/01 1,087,013
Series 2009B-1 $274,255,000 07/16/09 274,255,000 274,255,000 05/01, 11/01 18,960,907
Series 2009B-2 $22,000,326 [18] 07/16/09 24,463,499 26,307,325
Total First Lien Bonds 1,365,748,499 42,615,000 1,324,977,325 73,750,066
Intermediate Lien Bonds
Series 2005A New $ $252,190,000 07/20/05 251,260,000 03/01/10 915,000 250,345,000 03/01, 09/01 12,555,200
Series 2005A - Ref. 1994A $12,030,000 [12] 07/20/05 4,265,000 03/01/10 4,265,000 - 03/01, 09/01 106,625
Series 2005A - Ref. 1996A $31,475,000 [13] 07/20/05 31,035,000 - 31,035,000 03/01, 09/01 1,551,750
Series 2005A - Ref. 1997A $108,900,000 [14] 07/20/05 93,915,000 03/01/10 5,855,000 88,060,000 03/01, 09/01 4,566,400
Series 2005C - Ref. 1996B $40,120,000 [11] 06/06/06 [11] 31,680,000 09/01/11 4,255,000 27,425,000 03/01, 09/01 1,584,000
Series 2006A - Ref. 2000A $124,625,000 [16] 06/08/06 124,625,000 - 124,625,000 02/01, 08/01 6,172,675
Series 2010A Ref. 1998A $25,200,000 [19] 07/15/10 25,200,000 06/01/11 2,170,000 23,030,000 6/01,12/01 948,750
Series 2010B New Money $157,880,000 07/15/10 157,880,000 - 157,880,000 6/01,12/01 7,786,363
Series 2010B Ref. 2000B $63,435,000 [20] 07/15/10 63,435,000 - 63,435,000 6/01,12/01 3,151,563
Series 2010C Ref. 2005D $128,140,000 [21] 07/15/10 128,140,000 02/01/11 320,000 127,820,000 02/01,08/01 6,328,231
Total Intermediate Lien Bonds 911,435,000 17,780,000 893,655,000 44,751,556
Subordinate Lien Bonds
Series 1997 $108,830,000 03/26/97 108,830,000 09/01/11 7,665,000 [2] 101,165,000 Various [2] 1,741,280
Series 1998 Refunding $27,930,000 [4, 5] 05/07/98 12,675,000 08/01/11 1,550,000 11,125,000 02/01, 08/01 646,931
Series 1999A $127,140,000 11/14/02 121,840,000 - 121,840,000 03/01, 09/01 6,426,113
Series 1999B $116,815,000 11/14/02 58,095,000 09/01/11 8,880,000 49,215,000 03/01, 09/01 3,195,225
Series 2008 $200,715,000 [17] 06/11/08 200,715,000 - 200,715,000 Various [2] 3,211,440
Total Subordinate Lien Bonds 502,155,000 18,095,000 484,060,000 15,220,989
TOTAL REVENUE BONDS 2,779,338,499 78,490,000 2,702,692,325 133,722,611
Filename: _appendix.doc
Updated: 10/18/2011 XIII-25
Port of Seattle 2012 Preliminary Budget
SPECIAL REVENUE BONDS
PFC Rev. Bonds Series 1998A $118,490,000 [9] 07/16/98 118,490,000 - 118,490,000 06/01, 12/01 6,079,600
PFC Rev. Bonds Series 1998B $144,010,000 [9] 07/16/98 71,635,000 12/01/10 10,555,000 61,080,000 06/01, 12/01 3,788,428
TOTAL SPECIAL REVENUE BONDS 190,125,000 10,555,000 179,570,000 9,868,028
SPECIAL FACILITY REVENUE BONDS
Fuel Facilities Series 2003 $121,140,000 [10] 05/01/03 105,465,000 06/01/10 2,580,000 102,885,000 06/01, 12/01 5,347,875
TOTAL SPECIAL FACILITY REVENUE BONDS 105,465,000 2,580,000 $102,885,000 5,347,875
Notes:
[1] - Interest Payments shown in this schedule are gross amounts before use of any Capitalized Interest.
[2] - Estimated annual total. Interest paid monthly or at maturity. Principal paid annual or at maturity.
[3] - Series 2004C G. O. Ref. bonds refunded a portion of the Port's 1994B Revenue bonds, and refunded a portion of the 1994 G. O. bonds.
[4] - Series 2004 refunded a portion of the Port's series 1992A, 1994A, 1996B and 1998 revenue bonds.
[5] - Series 1998 (First Lien & Sub-Lien) refunded a portion of the Port's 1990 and 1992 bonds.
[6] - Series 2000D refunded a portion of the Port's 1990B bonds.
[7] - Series 2001C refunded a portion of the Port's 1990B bonds.
[8] - Series 2001D refunded a portion of the Port's 1992B bonds. It had a delayed delivery date of 8/7/02.
[9] - Debt services for PFC Bonds will be paid directly out of receipts from PFCs, not out of operating cash flow.
[10]-Debt services for Fuel Facilities is paid directly from Fuel Hydrant Facility income, not out of general operating cash flow.
[11] - Series 2005C refunded a portion of the Port's 1996B bonds. It had a delayed delivery date of 6/6/2006.
[12] - Series 2005A-Ref. 1994A refunded a portion of the Port's 1994A bonds.
[13] - Series 2005A-Ref. 1996A refunded a portion of the Port's 1996A bonds.
[14] - Series 2005A-Ref. 1997A refunded a portion of the Port's 1997A bonds.
[15] - Series 2006 G. O. Ref. Bonds refunded a portion of the Port's 1999A Special Facility bonds, and refunded a portion of the 2000A G. O. bonds.
[16] - Series 2006A Intermediate Lien refunded the outstanding 2000A First Lien series bonds.
[17] - Series 2008 Subordinate Lien refunded the 2003C bonds.
[18] - Series 2009B-2 First Lien Capital Appreciation Bonds were issued at $22,000,326 par. The outstanding principle balance at 12/31/2011 includes $4,306,999 of accumulated accreted interest.
[19] - Series 2010A Ref. 1998A Intermediate Lien refunded the outstanding 1998A First Lien series bonds.
[20] - Series 2010B Ref. 2000B Intermediate lien refunded a portion of the Port's 2000B Bonds.
[21] - Series 2010C Ref. 2005D Intermediate Lien refunded the 2005D Subordinate Lien Series Bonds.
The Port has authority to issue up to $250 million in Commercial Paper, as of 9/30/10 the Port had $110.455 million outstanding. bondam.xls
Filename: _appendix.doc
Updated: 10/18/2011 XIII-26
Port of Seattle 2012 Preliminary Budget
APPENDIX E: AVIATION LANDING FEE REVENUES
The landing fee rate and resulting landing fee revenue are based on the contractual agreement between the
Port's Aviation Division and the airlines. This contractual agreement permits the airlines to land and operate at
Sea-Tac International Airport.
The landing fee rate is established during the budget period for the following calendar year. The rate is subject
to revision during the calendar year and the landing fee dollars are adjusted to the actual airport costs at the
end of the calendar year in accordance with a formula outlined in the Basic Airline Lease. The airlines are
then billed or reimbursed accordingly for any differences.
The landing fee calculation provides that the airlines pay for the operating cost of the airport. The landing fee
formula is as follows:
To the total Airport Operating and Maintenance Costs
Add + Operating and Maintenance Expenses
Add + Capital Costs
(debt services, interim financing costs, etc.)
Add + Allocable Terminal Costs
Subtract - Other Airfield Revenues
(airfield properties, ID badging, gate parking, fuel flowage)
Add + Change in Security Deposit
Equals = Landing Fees required to support the airport
The landing fee rate is determined at the beginning of the year by dividing the landing fee revenues required,
based on the budgeted costs, by the estimated landed weights as provided by the airlines and reviewed for
reasonableness by Airport management.
TABLE E-1: LANDING FEE REVENUE CALCULATION
Seattle-Tacoma International Airport
Landing Fee Revenue Calculation
($ in 000's) 2012
Budget
Landing Fee Cost
Total Operating Costs $55,907
Capital Costs 29,499
Allocable Terminal Costs 1,123
Offset Other Airfield Revenues (16,932)
Change in Security Deposit 555
Landing Fee Revenues $70,152
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APPENDIX F: OTHER DETAILED EXPENDITURES
A. Promotional Hosting
Promotional hosting consists of expenses incurred by officials and employees of the Port in connection with
hosting others for the purpose of promoting the increased use of Port facilities and services.
TABLE F-1: PROMOTIONAL HOSTING BY DIVISION
($ in 000's) 2010 2010 2011 2012
DIVISION Notes Actual Budget Budget Budget
Aviation $ 138,618 $ 234,606 $ 229,138 $ 226,020
Seaport 43,000 72,885 81,785 71,455
Real Estate 9,307 11,475 21,000 20,213
Capital Development 132 1,900 700 1,700
Corporate 159,762 167,450 656,230 89,670
Total $ 350,818 $ 488,316 $ 988,853 $ 409,057
P ROMO.XLS
B. Memberships
The 2012 Budget for the Port of Seattle includes monies sufficient for memberships amounting to a totalof
$1,168,045.
In addition, the Chief Executive Officer may approve additional memberships and dues increases for 2012,
which may arise and which could not be foreseen at this time, provided these increases do not exceed 10% of
the total membership's budget.
Memberships are for associations for the purpose of participating on a cooperative basis with other port
districts, airports and with operators of terminal and transportation facilities, associations providing specialized
information and services, associations to better qualify certain employees in the performance of specified
duties which are assigned to such employees, and associations which are considered to be of particular and
special value in connection with the carrying out of the Port's promotion and advertising activities.
Membership is an effective way to leverage scarce resources to accomplish objectives that might otherwise be
omitted.
Filename: _appendix.doc
Updated: 10/18/2011 XIII-28
Port of Seattle 2012 Preliminary Budget
APPENDIX G:GLOSSARY OF TERMS USED
Account: Recording of an activity as revenue or expense, such as fees for services, rents, or as salaries,
equipment, supplies, travel, etc.
Accrual: Represents an outstanding obligation for goods and services received or performed but for which
payment has not been made.
Accrual Basis of Accounting: It is the basis of accounting under which revenue transactions are recognized
when earned and expenses are recognized when incurred, regardless of the time the cash is received or
disbursed.
Actual: Earned revenue or incurred expense during the stated fiscal year.
Allocated Expense: These are costs allocated to business groups from service providers. Allocated costs are
general support costs that cannot be directly attributed to a business unit, but instead support the entire Port
and all its Business Groups. Costs can come from within the division or from outside the division.
Amortization: The gradual reduction in the book value of Fixed or Intangible Assets having a limited life by
allocating the original cost over the life of the asset. (See Depreciation.)
Assessed Valuation: An official government valuation set upon real estate and personal property by the King
County Assessor as a basis for levying property taxes.
Balanced Budget: The Port prepares an annual budget and supports, encourages and commits to a balanced
budget in which revenues exceed expenses. In so doing, the practice is to pay for all current operating
expenses with current revenues and not postpone current year operating expenses to future years or accrue
future year's revenues to the current year. The Port policy further requires that budgeted operating expenses
do not exceed budgeted revenues, and on-going expenses do not exceed on-going revenues.
Budget: A financial plan, forecast or projection of the Port's revenues and expenses expected during the
stated budget year.
Budget Calendar: A schedule of key dates that the Port follows in the preparation, review and adoption of its
annual budget.
Budget Document: The Port's official written approved budget in document format, prepared by the Port's
Budget Office and supporting staff.
Budget Message: A general discussion of the proposed budget presented in written format by the Chief
Executive Officer of the Port to the Port Commission and Public.
Capital Budget and Draft Plan of Finance: A detailed five year plan of proposed capital expenditures
arising from the acquisition or improvement of the Port's fixed assets and the means of financing them through
bond proceeds, grants and operating revenues. This document serves as an operational and planning tool and
it is directly tied to the business plans. The document identifies proposed capital projects at the airport and on
the waterfront and prioritizes those projects.
Capital Capacity: An estimated calculation of the maximum amount available to spend on capital projects,
given assumptions about future revenues and expenses and the ability to cover future interest payments per
bond covenants and Port policies. See further discussion in the Draft Plan of Finance section.
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Capital Expenditures: Expend itures that arise from the acquisition or improvement of the Port's fixed assets.
Port assets are given a useful life of more than three years when they become active. The expenditures
reflected in the capital budget cover projects anticipated to provide modernized Seaport, Airport and Real
Estate facilities for sustained growth of the Port.
Capitalized Labor or Charges to Capital Projects: Include the salaries and benefits costs associated with
capital projects. These costs are subtracted out of the operating budget and then budgeted in the capital budget
as part of the cost of the project(s).
Cash Disbursements: The disbursement or payment of cash for cost incurred in the operation of the Port's
business.
Cash Receipts: The collection of cash from s ervices and from Port facilities and equipment leased or
operated.
Cost Per Enplanement (CPE): Airline cost per enplanement reflects the overall cost to the airlines for each
passenger enplaned. The CPE measures the total costs borne by the passenger airlines operating at the airport
divided by the number of enplaned passengers (roughly half of the total passengers). CPE is a key indicator
used by the airlines to measure the relative costs of airports.
Customer Facility Charges: As determined by applicable State legislation, customer facility charges
(CFC) generate revenue to be expended by the Port for eligible capital projects and the payment of principal
and interest on specific revenue bonds. CFC revenues received from the rental car companies are recorded as
non-operating income in the statements of revenues, expenses, and changes in net assets.
Department/Org: An organizational unit within the Port which is part of a division.
Depreciation: This is a non -cash item that represents the use of long-term assets. Port assets are given a
useful life of more than three years when they become active and each year some of that useful life is used up,
worn or depreciated. (See Amortization.)
Direct Charge: The ability to direct charged for services instead of allocating them, which is charging
against another division's/department's subclass to represent where resources were used and dollars spent for
the work that was actually done.
Draft Plan of Finance: A funding plan for the Capital Budget that identifies the types and amounts of funding
sources that are expected to be available in the five year planning period.
Enterprise Fund: There are dozens of funds that are summarized into the Enterprise Fund. The Enterprise
Fund accounts for all activities and operations of the Port. The Enterprise fund is connected to the functional
units in that it is used to account for operations and activities that are financed at least in part by fees or
charges to external users for Airport Facilities, Seaport and Real Estate properties. Therefore, the Port of
Seattle summarizes all of its fund activities in the Enterprise Fund. This includes the Port's major business
activities, which are comprised of three operating divisions - Aviation, Seaport, Real Estate; a Capital
Development division and a Corporate Professional and Technical Services division.
Environmental Remediation Liability: The Port's policy requires accrual of pollution remediation
obligation amounts when (a) one of the following specific obligating events is met and (b) the amount can be
reasonably estimated. Obligating events include: imminent endangerment to the public; permit violation;
named as party responsible for sharing costs; named in a lawsuit to compel participation in pollution
remediation; or commenced or legally obligated to commence pollution remediation. Potential cost recoveries
such as insurance proceeds, if any, are evaluated separately from the Port's pollution remediation obligation.
Costs incurred for pollution remediation obligation are recorded as environmental expenses unless the
expenditures meet specific criteria that allow them to be capitalized. Capitalization criteria include: preparation
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of property in anticipation of a sale; preparation of property for use if the property was acquired with known or
suspected pollution that was expected to be remediated; performance of pollution remediation that restores a
pollution-caused decline in service utility that was recognized as an asset impairment; or acquisition of
property, plant, and equipment that have a future alternative use not associated with pollution remediation
efforts.
Equity: The excess of assets over liabilities.
Estimates: Prediction of revenues and expenditures.
Fiscal Year: The Port's annual accounting period for recording financial transactions begins January 1 and
ends December 31, which is the same as the calendar year. It is also called budget year.
Forecast: An estimate, projection or prediction of revenues and expenses.
Full Time Equivalent: F ull Time Equivalent (FTE) employee, where full-time equals 100% of a full-time
schedule. A full-time employee is represented as a 1.0 FTE where 1.0 = 100% of a full-time schedule.
FTEs represented by less than 1.0, such as 0.8, represent less than a full-time schedule. For example, 0.8
FTE represents 80% of a full-time schedule.
Fund: The establishment of a fund is to account for money set aside for some specific purpose.
Generally Accepted Accounting Principles (GAAP): Standards and guidelines by which Accounting and
Financial Reporting are governed.
General Obligation (G.O.) Bonds and Interest: The Port can borrow money which is intended to be paid
back through its taxing authority. The tax levy (See Section IX) funds the repayment of the principal and
interest of these bonds. Port financial policies dictate that G.O. bonds be used for projects that have a long lag
between project costs and revenues or are insufficient to support revenue bond financing, the project generates
significant economic benefits for taxpayers, and the project is critical to the Port's core business.
Goals: Written statements that declare what the port/division/department plan to achieve to fulfill its mission.
Governmental Accounting Standards Board (GASB): It is the accepted standard-setting body for
establishing governmental accounting and financial reporting principles.
Government Finance Officers Association (of USA and Canada): The purpose of the Government Finance
Officers Association is to enhance and promote the professional management of governments for the public
benefit by identifying and developing financial policies and practices and promoting them through education,
training and leadership.
Inter-Division Allocation (Charges): Allocation or Charges from one division to another.
Intra-Division Allocation (Charges): Allocation or Charges from within the division.
Landing Fee: The landing fee rate and resulting landing fee revenues are based on the contractual agreement
between the Port's Aviation Division and the airlines. This contractual agreement permits the airlines to land
and operate at Sea-Tac International Airport. See the discussion of landing fees in Appendix E.
Majority in Interest (MII): Under the terms of the current agreement between the a irlines and the airport, the
airlines are entitled to vote their approval for particular capital projects that affect the airline rate base.
Millage: A tax rate on property, expressed in mills per dollar of value of the property.
Mission: States the reason why the port/division/department exists and what it is trying to achieve.
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Net Assets: As required by GASB Statement No. 34, Basic Financial Statements and Management's
Discussion and Analysis for State and Local Governments, net assets (equity) have been classified on the
statement of net assets into the following categories:
Invested in capital assets net of related debt: Capital assets, net of accumulated depreciation and
outstanding principal balances of debt attributable to the acquisition, construction, or improvement of
those assets.
Restricted: Net Assets subject to externally imposed stipulations on their use.
Unrestricted: All remaining net assets that do not meet the definition of invested in capital assets net of
related debt or restricted.
When both restricted and unrestricted resources are available for the same purpose, restricted assets are
considered to be used first over unrestricted assets.
Net Operating Income before Depreciation (NOI): Income from operations after all dir ect expenses and
allocated expenses, but before depreciation, non-operating revenues and expenses have been included.
Non-Airline Revenues: Include concession, parking and other fees not charged directly to the airlines. These
revenues help offset the residual landing fee requirement.
Non-Operating Expenses: Cost or charges that do not arise from the normal operation of the Port's business.
An example is interest expense.
Non-Operating Revenues: Revenues that do not result from the normal operation of the Port's business such
as: Ad Valorem Tax Levy, Interest Income, Non-operating Grants, Passenger Facilities Charges, Customer
Facilities Charges and other revenues generated from non-operating sources are classified as non-operating.
Operating Income before Allocations & Depreciation: Direct operating revenues minus direct operating
expenses. This does not include any allocated expenses.
Operating & Maintenance Expenses: Cost or charges that arise from the normal operation of Port's
business. These are cost or services required for a department/division to function. These include Salaries and
Benefits, Equipment expense, Supplies and Stock, Travel and Other Employee expenses and all Direct
Charges, even those from Corporate and from other Divisions.
Operating Revenues: Fees for services, rents, and charges for the use of Port facilities such as: Dockage,
Wharfage, Berthage and Moorage, Airport Transportation Fees, Airport Landing Fees, Equipment, Property
Rentals and other revenues generated from port's operations are reported as operating revenue.
Other Post Employment Benefits (OPEB): According to the Governmental Accounting Standard Board
(GASB) statement 45, government agencies are required to record post employment benefit costs other than
pensions as a liability based on actuarial costs.
Passenger Facilities Charges (PFCs): As determined by applicable federal legislation, passenger facility
charges ("PFC") generate revenue to be expended by the Port for eligible capital projects and the payment of
principal and interest on specific revenue bonds. PFC revenues received from the airlines are recorded as nonoperating
income in the statements of revenues, expenses, and changes in net assets upon passenger
enplanement.
Passenger Facilities Charges (PFCs) Bonds: Bonds backed by Passenger Facility Charges.
Passenger Traffic: Enplanements, deplanements and connecting passenger activity.
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Performance Indicators or Measures: Metrics used by Port management to determine whether a program is
achieving or accomplishing its mission efficiently and effectively.
Performance or Operating Budget: A financial plan that incorporates an estimate of proposed revenues and
expenses for a given period. A department's budget includes only those revenues and expenditures for which it
has control.
Plan of Finance: The Five -year Capital Budget is the basis of the Plan of Finance. This document provides a
funding plan of the capital program developed within the financial targets and forecasts described within the
Draft Plan of Finance section. The Draft Plan of Finance is prepared and presented to the Port Commission
concurrently with the Operating Budget. See further discussion in the Draft Plan of Finance section.
Port Commission: It is the governing body of the Por t of Seattle, which is comprised of five commissioners
elected at large by the voters of King County to serve four-year terms and to establish Port policy.
Repairs and Maintenance: Expenditures for routine maintenance and repairs to structure and minor
improvements to property, which do not increase the value of the capital assets.
Resolution: A formal expression of opinion or determination adopted by the Port Commission.
Revenue Bonds: A type of borrowing that is repaid through the dedication of reven ues intended to be
generated by the investment being funded by the bonds.
Revenue over Expense: The excess or deficit of revenues (operating and non-operating) over expenses
(operating and non-operating). The excess of revenues over expenses increases equity, whereas the deficit,
expenses over revenues, decrease equity.
Statutory Budget: A plan that depicts the cash flows of the Port. It shows the beginning balance, cash
receipts and cash disbursements and the balance at the end of the year. This budget must be filed with the
King County Council and the King County Assessor as required by law by a specific date. See Section XII.
Tax Levy: The amount of money to be raised by imposing of property taxes. See Section IX.
Twenty-foot Equivalent Unit (TEU): Is an international standard of measurement for the container volume
that moves through the Port. One forty-foot container is equivalent to two TEUs.
Variances: The difference between actual and budget amounts for revenues and for expenses, which
could be either favorable or unfavorable.
Favorable Variance: This is a positive variance and it exists when, in a given period:
Revenues: Actual revenues are higher than budgeted revenues
Expenses: Actual expenses are lower than budgeted expenses
Unfavorable Variance: This is a negative variance and it exists when, in a given period:
Revenues: Actual revenues are lower than budgeted revenues
Expenses: Actual expenses are higher than budgeted expenses
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Port of Seattle 2012 Preliminary Budget
APPENDIX H: ACRONYMS and ABBREVIATIONS
AAPA American Association of Port Authorities
AAAE American Association of Airport Executives
ACI Airports Council International
AEC Airport Employment Center
AIR 21 Aviation Investment & Reform Act for the 21st Century
AODB Airport Operations Database
APM Automated People Mover
ARFF Aviation Regional Fire Fighting
ATC Air Traffic Control
B&OT Business and Occupation Tax
BALA Basic Airline Lease Agreement
BHICC Bell Harbor International Conference Center
BHM Bell Harbor Marina
BHS Baggage Handling System
BLS Bureau of Labor Statistics
BY Budget Year
CAFR Comprehensive Annual Financial Report
CDD Capital Development Division, a Port Division
CDP Comprehensive Development Plan
CEO Chief Executive Officer
CERT Community Emergency Response Team
CFC Customer Facility Charge
CFO Chief Financial Officer
CIP Capital Improvement Program
CMMS Computerized Maintenance Management System
CPE Cost per Enplanement
CPI Consumer Price Index
CPO Central Procurement Office
CPR Cardio Pulmonary Resuscitation
CTDP Container Terminal Development Plan
CTE Central Terminal Expansion
CY Calendar Year
CY Container Yard
DHS Department of Homeland Security
DNR Department of Natural Resources
DOT Department of Transportation
EIS Environmental Impact Statement
EPA Environmental Protection Agency
ETDD Economic and Trade Development Department
ESGR Employer Support of the Guard Reserve
FAA Federal Aviation Administration
Filename: _appendix.doc
Updated: 10/18/2011 XIII-34
Port of Seattle 2012 Preliminary Budget
FAR Federal Aviation Regulations
FASB Financial Accounting Standard Board
FAST Freight Action Strategy Corridor
FEMA Federal Emergency Management Agency
FIS Federal Inspection Area
FMC Federal Maritime Commission
FTE Full-time Equivalent Employee
FTPP Fishermen's Terminal Piers and Properties
FY Fiscal Year
GAAP Generally Accepted Accounting Principles
GASB Governmental Accounting Standards Board
GFOA Government Finance Officers Association (of USA and Canada)
GIS Geographical Information System
G.O. General Obligation (Bond)
GT Ground Transportation
HCM Human Capital Management
HDS Harbor Development Strategy
IDC Industrial Development Corporation
IFO Income From Operations
ILA Interlocal Agreement
IMC Intermodal Center
ICT Information and Communications Technology, a Port department
KPI Key Performance Indicators
LOI Letter of Intent
LRT Light Rail Transit
MAP Million Annual Passengers
MBE/WBE Minority & Women Owned Business Enterprise
MIC Marine Industrial Center
MIS Management Information System
MOBI Marina Operation Boating Inventory System
MPT Main Passenger Terminal
MT Main Terminal
NAMF North Area Maintenance Facility
NAC Neighborhood Advisory Committee
NEPA National Environmental Policy Act
NEST New Economic Strategy Triangle
NMA National Management Association
NOI Net Operating Income
NTSB National Transportation Safety Board
NWMTA Northwest Marine Terminal Association
O&D Origin and Destination
O&M Operating and Maintenance Expense
OPEB Other Post Employment Benefits
Filename: _appendix.doc
Updated: 10/18/2011 XIII-35
Port of Seattle 2012 Preliminary Budget
P&TS Professional and Technical Services
PCC Pacific Coast Congress
PCS Port Construction Services, a Port department
PFC Passenger Facility Charges
PLA Project Labor Agreement
PM Project Manager
PMA Pacific Maritime Association
PMG Project Management Group
PNWA Pacific North West Waterways Association
POS Port of Seattle
PPE Personal Protective Equipment
PPM Post Panamax
PREP Performance Review, Evaluation & Planning
PSA Professional Service Agreement
PSCAA Puget Sound Clean Air Agency
PSRC Puget Sound Regional Council
RCF Rental Car Facility
RCW Revised Code of Washington
RE Real Estate, a Port Division
RFP Request For Proposal
RMM Regulated Materials Management
SBM Shilshole Bay Marina
SDS Storm water Drainage System
SSA Stevedoring Services of America
STEP South Terminal Expansion Project
STIA Seattle-Tacoma International Airport
STITA Seattle-Tacoma International Taxi Association
STS Satellite Transit System
USCG United States Coast Guard
USDA United States Department of Agriculture
TEU Twenty-foot Equivalent Unit
TSA Transportation Security Administration
WSDOT Washington State Department of Transportation
WPPA Washington Public Ports Association
Filename: _appendix.doc
Updated: 10/18/2011 XIII-36
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